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Pratim Ranjan Bose
Virendra Pandit

Ahmedabad, Sept. 6 Gujarat State Petroleum Corporation is expecting the approval of the Directorate-General of Hydrocarbons (DGH) on the commerciality of the KG-8 discovery in KG basin offshore block (KG-OSN-2001/3) in the next couple of weeks.

The approval would help GSPC to leapfrog towards the development of the field and submit the draft red herring for the planned Rs 4,000-6,000-crore IPO.

“The DGH has sought certain clarifications in regard to our application for declaration of commerciality of the KG-8 discovery. We have already answered them. Based on my discussion with the DGH officials, I presume they are satisfied with our clarifications and will approve the commerciality in the next couple of weeks,” GSPC managing director, Mr D.J. Pandian, told Business Line.

KG-8 is one of the major discoveries by GSPC in the block. The group has recently struck another rich find at KG-22 well.

DGH had initially estimated the reserve size at 1.6 trillion cubic feet (tcf). However, based on the results on the appraisal drilling, GSPC now approached the DGH for revision of reserve estimates of the find — covering only 15 sq km out of the total area of 95 sq km — up to 5.6 tcf. The company is carrying out exploratory drilling in the residual part of the block.

While a detailed field development plan will be submitted for due approval of the DGH once the commerciality is declared, preliminary estimates suggest that the GSPC may propose production of 5-6 million standard cubic metre of gas a day (mmscmd) from Deendayal West.

Anticipating DGH’s approval, the company has already carried out the sensitivity study and the front end engineering design (FEED) study on field development. The plan will include development of offshore production platforms and onshore processing facilities for processing and transportation.

The company estimates a total capital requirement of Rs 1,200-1,500 crore in its E&P operations during this fiscal.

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