ONGC purchase of GSPC stake in KG basin gas field approved

New Delhi, July 28 (IANS) State-run explorer Oil and Natural Gas Corp (ONGC) has received government approval for acquiring Gujarat State Petroleum Corp's (GSPC) entire 80 per cent stake in a Krishna Godavari (KG) basin gas block in the eadtern offshore for Rs 7,738 crore, according to ONGC.

"Government of India has approved the acquisition of entire 80 per cent participating interest of GSPC along with operatorship rights," ONGC said in notes appended to its results for the first quarter of the current fiscal declared on Thursday.

In December last, ONGC had agreed to acquire GSPC's entire 80 per cent interest, along with operatorship rights, in the Deen Dayal West (DDW) gas field in Block KG-OSN-2001/3 in the Bay of Bengal for Rs 6,443 crore.

"A farm-in agreement was signed with GSPC on March 10, 2017 with an economic data of March 31, 2017," ONGC said.

ONGC will make payments to GSPC "on fulfilment of certain conditions precedent," the filing added.

ONGC also agreed to pay part consideration of Rs 1,295 crore to GSPC towards acquisition rights for discoveries in the block other than the DDW field.

Privately-owned Jubilant Offshore Drilling and Geo Global Resources (India) hold 10 per cent stake each in the block.

According to a company official, GSPC, with a debt of nearly Rs 20,000 crore, has so far made nine gas discoveries in the KG basin block. Of these, three -- KG-08, KG-17, KG-15, known as Deendayal West (DDW) fields, have been approved for development.

As per the approved field development plan of the DDW fields, the estimated oil and gas in place was 1.95 trillion cubic feet.

ONGC on Thursday posted an 8.2 per cent fall in net profit for the first quarter ended June at Rs 3,885 crore, as compared to the Rs 4,233 crore PAT reported in the same quarter of 2016-2017, caused by lower prices for natural gas produced

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