GSPC to invite fresh global bids to sell KG block stake
Earlier bids scrapped due to differences on valuation, lack of data.
By Piyush Pandey, TNN |
MUMBAI: Gujarat State Petroleum Corporation (GSPC) has decided to call for fresh bids from global majors to sell up to a 30% stake in Krishna Godavari basin block KG-OSN-2001/3, where it discovered gas in 2005.
GSPC has called global oil majors to a pre-bid conference in London later this month. Earlier, GSPC had shortlisted four oil companies — Chevron, BP, BG Group and ENI of Italy for final negotiations through a global tender, but no single company was chosen due to differences on valuation and lack of enough data.
Earlier, GSPC’s claim of 20 trillion cubic feet (tcf) of gas was questioned when upstream regulator, the Directorate General of Hydrocarbons (DGH), pegged the discovery between 1 tcf and 3 tcf. In a new development last month, GSPC informed the DGH that it has struck gas in multiple hydrocarbon zones in another well in the same block.
GSPC’s managing director DJ Pandian declined to comment. Global majors like British Petroleum, BG Group, Chevron, Exxon Mobil, Repsol YPF of Spain, Total of France, ENI of Italy, Husky Energy of Canada and Statoil of Norway have already accessed data from GSPC’s data room.
Sources in the company told ET: “Few companies are still studying data for the KG block. Once they complete the techno-economic study, we will decide on the final bidding process.”
In a recent exploration update issued on September 24, Jean P Roy, president and CEO of GeoGlobal Resources, GSPC’s Canadian partner said, as a result of this initial success, I believe DST-1 (drill stem testing) in the KG#28 well confirms the extension of the Deendayal discovery in an easterly direction from the existing platform.
GSPC hopes to submit the final plan for its KG basin by December 2007 and begin gas production around 2009-10. The company owns a 80% stake in the block and the rest is held by GeoGlobal Resources and Jubilant Enpro.
An analyst working with an international research firm said, “GSPC needs money and technology to develop the block as its discovery is in high pressure and high temperature zone. By giving stake to a global major GSPC will gain technology and money to develop the block.”
GSPC has called global oil majors to a pre-bid conference in London later this month. Earlier, GSPC had shortlisted four oil companies — Chevron, BP, BG Group and ENI of Italy for final negotiations through a global tender, but no single company was chosen due to differences on valuation and lack of enough data.
Earlier, GSPC’s claim of 20 trillion cubic feet (tcf) of gas was questioned when upstream regulator, the Directorate General of Hydrocarbons (DGH), pegged the discovery between 1 tcf and 3 tcf. In a new development last month, GSPC informed the DGH that it has struck gas in multiple hydrocarbon zones in another well in the same block.
GSPC’s managing director DJ Pandian declined to comment. Global majors like British Petroleum, BG Group, Chevron, Exxon Mobil, Repsol YPF of Spain, Total of France, ENI of Italy, Husky Energy of Canada and Statoil of Norway have already accessed data from GSPC’s data room.
Sources in the company told ET: “Few companies are still studying data for the KG block. Once they complete the techno-economic study, we will decide on the final bidding process.”
In a recent exploration update issued on September 24, Jean P Roy, president and CEO of GeoGlobal Resources, GSPC’s Canadian partner said, as a result of this initial success, I believe DST-1 (drill stem testing) in the KG#28 well confirms the extension of the Deendayal discovery in an easterly direction from the existing platform.
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GSPC hopes to submit the final plan for its KG basin by December 2007 and begin gas production around 2009-10. The company owns a 80% stake in the block and the rest is held by GeoGlobal Resources and Jubilant Enpro.
An analyst working with an international research firm said, “GSPC needs money and technology to develop the block as its discovery is in high pressure and high temperature zone. By giving stake to a global major GSPC will gain technology and money to develop the block.”
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