The Hindu Business Line : GSPC more than doubles capex budget

Ahmedabad, July 13 Gujarat State Petroleum Corporation Ltd (GSPC) plans to raise Rs 2,000 crore long-term loan to meet its capital expenditure over next 12 to 15 months. The bulk of the amount may be invested in exploratory drilling in the KG basin offshore block, where the company has already struck gas.

“We have recently appointed SBI Caps for loan syndication. We are expecting the funds to be tied up by the next month,” a senior GSPC official said. “The funds will be utilised in drilling four-five more exploratory wells in the KG basin block and fulfilling drilling commitments several onshore exploratory assets,” he added.

According to sources, the company has more than doubled its capital expenditure budget for the current fiscal compared to Rs 1,000 crore in 2006-07.

Exploratory drilling

The company has already drilled six exploratory wells in the shallow waters of the Western part of the KG basin find. While exploratory drilling in the Western part is coming to an end, GSPC will now start drilling the more prolific eastern part of the block, once Essar Wildcat semi-submersible rig joins the action, in August-September.

The company has already pressed three rigs into action for exploratory drilling in the Western and Northern part of the block and appraisal drilling in support of its 1.3 trillion cubic ft find in KG-8 well.

On appraisal drilling, the source said that the company has already reached 4,500 metres depth against a target of 5,100 metres. “If testing results of this well proves adequately positively we may not require to drill the contingency wells, as recommended by the Directorate-General of Hydrocarbons,” he said.

Apart from KG basin, GSPC is also expected to take up exploratory drilling in the onshore Cambay basin NELP blocks and Tarapur block, where it has already struck oil.