Companies

‘No underhand dealing in KG gas field sale’

Press Trust of India Gandhinagar | Updated on January 12, 2018 Published on January 15, 2017

‘GSPC did not have enough financial strength to go forward with the project’ Paul Noronha

Gujarat Chief Secretary defends sale to ONGC

In a strong rebuttal of allegations of scam in the sale of KG gas field, the Gujarat government has said there is no “underhand” dealing as the field is being transferred from one PSU to another, and the country’s asset continues to be with the public sector.

Gujarat State Petroleum Corp (GSPC) had originally considered selling the Deen Dayal gas fields in Bay of Bengal to BG Group of the UK but last month, struck a deal to sell them to state-owned Oil and Natural Gas Corporation (ONGC) for $1.2 billion.

Funds crunch

In an interview to PTI, Gujarat Chief Secretary and GSPC MD JN Singh said the fields in KG basin, off the Andhra coast, were at “some point seen as a very, very promising gas site in the country.”

“But we did not have enough financial strength to go forward with it beyond a point. And then we started looking for some strategic partners or others who along with us could do it. Initially, there was British Gas and some others in the discussion, and ultimately, by consensus, it was felt it was much better if it is done with an Indian PSU,” he said.

ONGC, he said, is technically and financially much more sound and it also has the advantage of having gas fields at adjacent block in KG basin.

Asked about Congress MP Jairam Ramesh’s allegation of a ₹8,000 crore scam in a Central PSU being used to bail out GSPC that was on verge of a loan default, he said, “It is a political thing. I don’t want to respond to it.”

‘Win-win situation’

“It is a win-win situation if the country’s assets continue to be with the PSU. By transferring it from one PSU to another, there is no private dealing, no underhand dealing. So, where is the question of conspiracy or judicial enquiry?” he asked.

Even if the gas fields, where GSPC has till now spent close to $3 billion, were to have been sold to British Gas

“at a higher cost, it would always be open to question. Now it goes to ONGC. We are very happy,” he said.

Ramesh’s charge

Ramesh, in an open letter to SEBI Chairman UK Sinha, had alleged that GSPC has been trying to recover gas from the KG basin block for more than a decade without much success despite massive borrowings of close to ₹20,000 crore.

Alleging that ONGC had flouted listing guidelines and did not secure approval of minority shareholders for the transaction, he said the state-owned company “suddenly” after 2014, had a realisation that buying GSPC’s gas block in KG basin is a virtue.

GSPC has spent large sums of money, hired foreign experts and imported sophisticated equipment and yet could not find gas. “Then, why does ONGC deem it fit to pay ₹8,000 crore to acquire this very block?” he said, demanding a probe into the deal.

Published on January 15, 2017
This article is closed for comments.
Please Email the Editor