ONGC acquires 80% of GSPC‘s K-G field

Oil and Natural Gas Corporation Ltd (ONGC) has announced its decision to acquire the entire 80 per cent stake in interest of Gujarat State Petroleum Corporation Ltd’s (GSPC) block in the Krishna- Godavari basin at US$995.26 million.
ONGC will also pay an US$200 million to GSPC as an advance for six discoveries other than the Deen Dayal West Field in the block. The advance will be adjusted in the final payment after the valuation of the discoveries, based on approved cost of the field development plans by the Directorate General of Hydrocarbons. The transaction would be documented by signing a farm-in agreement with GSPC. Requisite approval from the government will be sought by GSPC in accordance with provisions of production sharing contract of the block.

The block, KG-OSN-2001/3, was allotted to the government-owned GSPC during the third round of the National Exploration Licensing Policy (NELP) auction. “The acquisition of PI and operatorship rights in the Block fits well with the ONGC strategyto enhance natural gas production from domestic fields on a faster pace, more so with a goal to reduce import dependency of hydrocarbons by the 10 per cent by year 2021-22. The trial gas production from Deen Dayal West Field has already begun. Upon successful completion of the transaction, ONGC shall endeavour to bring the field on commercial production along with the existing partners in the Block,” a ONGC statement said.

According to the state-run exploration major, the Deen Dayal Field will act as a pivot in developing nearby discoveries in Yanam and Godavari PML areas of ONGC simultaneously. Through the utilisation of infrastructure of the Deen Dayal West Field, ONGC will be able to bring the gas discoveries of KG-DWN-98/2 NELP Block and adjacent nomination blocks to production on a fast track.

GSPC has already built production facilities like well head platforms, process cum living quarter platform, onshore gas terminal and export pipeline for transporting treated well fluid from process platform to onshore terminal in the area. ONGC is the largest producer of crude oil and natural gas in India, contributing around 70 per cent of Indian domestic production.