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Pratim Ranjan Bose

Virendra Pandit

Kolkata/Ahmedabad, Jan. 21 Gujarat State Petroleum Corporation (GSPC) seems to have pushed its plans to include a foreign strategic partner in KG Basin block, in the back burner for the second time.

The fresh developments following elections in December, suggest that the State Government may prefer to opt the IPO route to unlock the value in GSPC and its assets, and fund the development of its KG basin block as well. A decision in this regard is expected by mid-February. IPO may as well be used as an option to rope in a strategic partner in the company.

Senior GSPC officials said that the company was awaiting a go ahead from the State Government for the IPO, followed by Board approval to appoint issue advisors.

“We are expecting to reach a conclusive decision in this regard in next couple of weeks,” a company official said, adding that depending on the State approval, the company may hit the capital market by mid-2008.

The IPO decision may coincide with GSPC’s move to develop the first phase of Deendayal gas field in KG Basin. GSPC plans to develop KG-8 find at an estimated cost of $700 million (Rs 2,800 crore) in phase-I, is subjected to Directorate General of Hydrocarbon’s (DGH) approval.

Having tasted success in appraisal drilling for the development of KG-8 gas discovery during September-October 2007, the company has already made a presentation before the DGH for declaration of commerciality of the find without further appraisal drilling.

“We are extremely hopeful that the management committee would declare the commerciality of the find in next couple of weeks. In the meantime, we have started working on the field-development plan (FDP) so that we may submit the same as soon as the commerciality is approved. We are hopeful that the process will be over by March, 2007,” a GSPC official said.

It may be mentioned that KG-8 is one of the several discoveries made by GSPC in KG-OSN-2001/3.

The company currently has two rigs Saipem’s Perro Negro 3 and Atwood Beacon at its disposal to carry out drilling activity in the block and has recently struck gas in two wells KG-22 and KG-31. Both the finds are now being tested.

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