ONGC gets Govt nod for 7,738 cr GSPC stake buy

Source: The Hitavada      Date: 29 Jul 2017 09:20:32


NEW DELHI,

July 28,

(PTI),

STATE-OWNED Oil and Natural Gas Corp (ONGC) has won Government approval for acquisition of Gujarat State Petroleum Corp’s entire 80 per cent holding in a KG basin gas block for Rs 7,738 crore, the company said. ONGC had in December last year agreed to buy entire 80 per cent interest of GSPC along with operatorship rights, in Deen Dayal West (DDW) gas field in Block KG-OSN-2001/3 in the Bay of Bengal for USD 995 million (Rs 6,443 crore). The company will also pay part consideration of USD 200 million (Rs 1,295 crore) to GSPC towards acquisition rights for discoveries other than DDW field in the block.

“A farm-in agreement was signed with GSPC on March 10, 2017 with an economic data of March 31, 2017,” ONGC said in notes to its first quarter earning disclosure. During April-June quarter, “Government of India has approved the acquisition of entire 80 per cent participating interest of GSPC along with operatorship rights,” it said.

ONGC will make payments to GSPC “on fulfilment of certain conditions precedent,” it said without elaborating. A company official said the deal is likely to be closed within one month. ONGC will pay USD 995.26 million for three discoveries in the KG-OSN-2001/3 block that are under trial production since August 2014. Another USD 200 million will be paid for six other discoveries for which GSPC has been finalising an investment plan to bring them to production. Jubilant Offshore Drilling Private Limited and Geo Global Resources (India) Inc hold 10 per cent stake in the block.