GSPC to raise $2bn to develop KG block

MUMBAI: Gujarat State Petroleum Corporation (GSPC) is planning to raise more than $2bn (nearly Rs 9,000 crore) for developing the Deendayal block in the gas-rich Krishna-Godavari (KG) basin. Initially, the company will raise $1bn by selling up to 30% in the Deedayal block to an international partner.

Another $1bn will be raised through its maiden public offering. GSPC discovered 20 trillion cubic feet (TCF) of gas in the Deendayal block in ’05.

Confirming the development, a senior GSPC official told ET, “We will decide on our foreign partner by January 2007 and hit the capital market by March-end. We are planning to raise between Rs 4,000 crore and Rs 5,000 crore trhough the IPO.” He did not disclose the valuation of the Deendayal block. GSPC’s managing director, D J Pandian, could not be reached for his comments.

The company has sortlisted four global players — BP, the BG Group, Chevron and ENI of Italy — as potential partners on technical parameters. From this list, GSPC will select its partner on the basis of financial parameters by January end. GSPC has an 80% stake in the Deendayal block, while the remaining 10% is shared by India’s diversified group Jubilant Enpro and Geo Global Resources of Canada.

“The government will retain majority stake in the corporation even after stake sale in the block to a foreign partner and IPO,” a Gujarat government official said.