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Gujarat state firm reopens sale of stake in KG basin

Gujarat state firm reopens sale of stake in KG basin
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First Published: Sat, Jul 21 2007. 02 29 AM IST
Updated: Sat, Jul 21 2007. 02 29 AM IST
Ahmedabad: The state government-owned Gujarat State Petroleum Corp. (GSPC) has reopened the process of selling up to 30% of its equity in its off-shore exploration and production block at Krishna-Godavari (KG) basin on the eastern coast of India.
Exxon Mobil Corp. of the US, Total SA of France, Statoil of Norway, Spain’s Repsol YPF and Canada’s Husky Energy Inc. will now join the race, along with four other global players shortlisted earlier, to bid for GSPC’s KG block equity.
In April 2006, GSPC had invited bids from international hydrocarbon players for this stake. Eleven global players initially approached GSPC but only four—BG Plc., BP Plc., Chevron Corp. of the US and ENI Spa of Italy—were shortlisted and given access to the data room opened by GSPC in Houston, Texas.
A data room is where all data collected during drilling of a well is stored and collated to evaluate the availability of hydrocarbons.
The four companies submitted their technical bids in June last year.
In technical bids, a bidder decides on the technology applications needed to explore and later recover hydrocarbons from the field.
Instead of going ahead with these four bids, GSPC has now reopened the entire process and allowed more firms to access the dataroom.
GSPC holds 80% equity in the block, while Jubilant Enpro Ltd holds 10% and GeoGlobal Resources (GGR) of Canada and its chairman J.P. Roy hold 5% each.
Confirming the development, the minister of state for energy & petrochemicals in Gujarat, Saurabh Patel, said: “We have been receiving representations from several firms that were not shortlisted to inspect the data room. We have decided to allow them entry into the room.”
The new bidders are expected to submit their final techno-commercial bids by the end of October and, by November, GSPC hopes to decide on a new partner.
Apart from the shortlisted firms, other companies, such as Gazprom of Russia, Cairn Energy of the UK and Petronas of Malaysia, too, have shown interest in entering into a broader cooperation with GSPC, including a stake in the KG block, said GSPC managing director D.J. Pandian. “We will provide the parties with the test results of all the wells drilled so far and even those that will be available by August.”
GSPC had announced its biggest ever discovery of 20 trillion cubic feet (tcf) of natural gas from this field in 2005. The director general of hydrocarbons, however, has officially put the oil reserves figure at 3.6 tcf, less than 20% of what GSPC had claimed.
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First Published: Sat, Jul 21 2007. 02 29 AM IST