ONGC hires consultants to evaluate GSPC KG block reserves

US-based Ryder Scott Petroleum Consultants will evaluate gas properties and independently certify the reserves quantities

GN Bureau | August 29, 2016


#Sushma Swaraj   #Nirmala Sitharaman   #Facebook   #Twitter   #social media   #Digital India   #ONGC   #GSPC   #consultants   #KG block  

 State-owned ONGC has hired US-based Ryder Scott Petroleum Consultants to assess natural gas reserves in Gujarat State Petroleum Corp's (GSPC) KG (Deendayal) block before deciding to buy a stake in it.

 Ryder Scott has been asked to evaluate gas properties in the GSPC block and independently certify the reserves quantities. It will submit its report by November.
 
 Since the BJP-led government came to power at the centre, the Gujarat government firm GSPC has been seeking to sell a majority stake in its Deendayal block in the Bay of Bengal to ONGC to avoid defaulting on loans. ONGC initially was not keen to buy stake in the block as it felt the block had reserves far less than what GSPC was claiming and the asking price for the stake was not commensurate with the returns.
 
 According to a news report, there is tremendous amount of pressure on ONGC to buy stake in GSPC block. That is why it has decided to get the reserves in the GSPC block validated.
 
 GSPC was to begin gas production from the block in 2013 but after sinking in $3.6 billion it was found that gas reserves are one-tenth of 20 trillion cubic feet claimed in 2005 and that too is technically difficult to produce.
 
 In the process, it amassed Rs 19,576 crore of debt, on which interest cost was Rs 1,804.06 crore in 2014-15, according to the CAG. And against this its revenue was Rs 152.51 crore in 2014-15.
 
 GSPC has been doing trial production of a very small volume of gas from August 2014 and has not yet reached commercial production yet. And in absence of revenue commensurate with the debt servicing obligations it risks of becoming a defaulter. To bail out of the situation, it offered to sell 50 percent stake to ONGC. Money from ONGC can repay a part of the debt and the remaining would become a joint liability of the two firms.
 

Comments

 

Other News

On a personal note: DIVINE

An underground rapper who grew up on Mumbai streets, Divine spins his music around his environment and poverty. His breakout single, ‘Meri Gully Mein’, along with fellow rapper Naezy caught Bollywood’s attention. The Hindi film ‘Gully Boy’ is inspired by their lives and gr

The role model for an IAS officer

Anil Swarup, an IAS officer of Uttar Pradesh cadre who retired in 2018, is a model bureaucrat who retained his optimism right till the end of service and exemplified dedication and commitment. His excitement at the opportunities that a job in the IAS provided is evident on every page of his new book publis

Reform of the civil services: At home and away

The question of reform of the civil services has been debated extensively at all levels at least over the last five to six decades after independence. Indeed, it was soon perceived that the Indian Administrative Service (IAS) may not be well equipped to deal with the problems of an emerging developing coun

The greatest challenge for any government

Shouting vengeance at all and sundry while wriggling out of holes of our own making seems to be our very special national characteristic. Some recent instances are illustrative of this attribute. A number of business tycoons with thousands of crores of unresolved debts have fled abroad with the government

The mysterious case of CBI’s legality

The Central Bureau of Investigation (CBI) came into existence, based on a Resolution of the home ministry, dated April 1, 1963 – a sheer coincidence that it also happens to be April Fool’s day. Over the past few months, we have seen the CBI live up to its founding day with great zeal, being i

The Evolution of Modi

Gujarat was passing through a turbulent phase in the 1980s. The decade began middle class agitations against new reservation policies, and the caste friction turned communal under the watch of chief minister Madhavsinh Solanki, alienating majority of urban population on both counts. The ground was ripe for

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter