ONGC to buy GSPC’s KG basin block -Governance Now

ONGC to buy GSPC’s KG basin block

The acquisition of participating interest and operatorship rights in the block fits well with the strategy of ONGC to boost gas production

GN Bureau | December 26, 2016

#gas production #ONGC #PSU #KG basin

The Oil and Natural Gas Corp. Ltd (ONGC), a Maharatna PSU, has decided to buy an 80 percent stake and development rights in Gujarat State Petroleum Corp. Ltd’s (GSPC’s) Deen Dayal West field in the Krishna Godavari offshore block for $995.26 million, a statement issued by the corporation said.

ONGC said that it would 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/Management Committee of the block.

The trial gas production from Deen Dayal West Field has already begun. Upon successful completion of the transaction, ONGC would bring the field on commercial production along with the existing partners in the Block.

“The acquisition of participating interest and operatorship rights in the block fits well with the strategy of ONGC to boost natural gas production from domestic fields at a rapid pace, more so with a goal to reduce import dependency of hydrocarbons by 10 per cent by 2021-22,” the statement said.

ONGC is the largest producer of crude oil and natural gas in India, contributing around 70 percent of Indian domestic production. ONGC's market capitalisation as on December 23, 2016, was Rs 2,477 billion ($36.47 billion).

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