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India's largest hydrocarbon explorer, Oil and Natural Gas Corporation (ONGC) has acquired 80% stake in Gujarat government run Gujarat State Petroleum Corporation's (GSPC) KG-OSN-2001/3 block. Effectively ONGC has bought the entire 80% Participating Interest (PI) of GSPC along with operatorship rights, for $ 995.26 million for the Deen Dayal West Field in the Block. According to a statement from ONGC, GSPC has, “already built significant production facilities like well head platforms, process cum living quarter platform, onshore gas terminal, export pipeline for transporting treated well fluid from process platform to onshore terminal etc.”
ONGC noted that it will also pay part consideration of $ 200 million to GSPC towards future consideration for six discoveries other than Deen Dayal West Field, which will be adjusted upon valuation of the these discoveries subsequent to approval their Field Development Plans by DGH and the Management Committee of the Block.
According to ONGC, an HP-HT corridor of oil and gas is emerging in the KG Basin. The Deen Dayal Field will act as a pivot in developing nearby HP-HT discoveries in Yanam and Godavari PML areas of ONGC, simultaneously. ONGC also finds opportunity to bring the Cluster-I gas discoveries of KG-DWN-98/2 NELP Block and adjacent nomination blocks on a fast track development through utilization of infrastructure of Deen Dayal West Field.
The press statement noted, “The trial gas production from Deen Dayal West Field has already begun. Upon successful completion of the transaction, ONGC shall endeavour to bring the field on commercial production along with the existing partners in the Block.”
GSPC’s Deen Dayal block has always been in controversy, including facing allegations from the main opposition Congress Party. In fact, Congress has also been questioning why ONGC should consider GSPC deal. Congress spokesperson and former Union minister Jairam Ramesh told reporters in October this year that during his stint as Gujarat Chief Minister, Prime Minister Narendra Modi had claimed in 2005 that GSPC had found gas of 20 tcf in the KG Basin. “After 11 years, they have found only 1 tcf of gas. Using this claim, he made GSPC borrow ₹20,000 crores of money from 15 public sector banks. GSPC squandered this taxpayer’s money recklessly through suspicious transactions with dubious companies in India, Yemen, Egypt, Indonesia, etc,” Ramesh had said.
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