ONGC hires consultants to evaluate GSPC KG block reserves -Governance Now

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

Modi inaugurates, lays foundation stone of Pune Metro projects

Prime minister Narendra Modi inaugurated and laid the foundation stone for Pune Metro projects worth around ₹21,800 crore on Tuesday through video conferencing. Addressing the gathering on the occasion, the PM extended warm Diwali greetings to the people of Pune and Maharashtra and remarked that f

Wired for good: Building sustainable cities with AI

The First Industrial Revolution in the 18th-19th centuries ushered in a paradigm shift in how cities were imagined. Fueled by railways, factories and grids, and obsessed with speed and scale, it was an ode to efficiency, which spurred unprecedented economic growth. Now, as the Fourth Industrial Revolutio

How social media is reshaping elections

Since Brazil’s return to direct presidential elections in 1985, no candidate who finished second in the first round of polling had ever won the presidency. Luiz Inácio Lula da Silva, now 81, has just done it. What explains the comeback, and what changed in Brazilian politics to make it possi

Cabinet approves Dearness Allowance, Dearness Relief

The union cabinet chaired by prime minister Narendra Modi on Wednesday approved the release of an additional instalment of Dearness Allowance (DA) to central government employees and Dearness Relief (DR) to pensioners with effect from 01.07.2026 representing an increase of 3% over the existing rates of 6

Cyclone Arnab strikes Andhra as warming oceans amplify storm risks

Cyclone Arnab made landfall along the Andhra Pradesh and Yanam coasts in the early hours of Wednesday as a very severe cyclonic storm, with maximum sustained wind speeds of 125–135 kmph and gusts reaching 150 kmph. Its rapid intensification has raised concerns about how warmer oceans, global warmin

Counting matters but which ones?

The first instinct of public policy is to count. Its harder task is to count what counts. We have become remarkably good at measuring the reach of the welfare state vis-à-vis beneficiaries covered, rupees transferred, houses built, connections installed and services delivered. But some of the most