ONGC to acquire GSPC’s 80% stake in KG basin

The Dollar Business Bureau 

Oil and Natural Gas Corporation Ltd. (ONGC) has been exploring potential opportunities with Gujarat State Petroleum Corporation Ltd. (GSPC) to purchase the latter’s stake and operatorship in NELP-III Block in Krishna Godavari (KG) Basin offshore.

The board of ONGC had approved an acquisition of the entire 80% participating interest of GSPC along with operatorship rights, at a purchase consideration of $995.26 million for Deen Dayal West Field in the Block. ONGC will also pay $200 million to GSPC for six other discoveries, in addition to Deen Dayal West Field.

GSPC has already installed production facilities such as well-head platforms, process-cum-living quarter platform, onshore gas terminal, export pipeline for transporting treated well fluid from process platform to onshore terminal etc.

“The acquisition of participating interest and operatorship rights in the Block fits well with the strategy of ONGC to 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% by the year 2021-22. Upon successful completion of the transaction, ONGC shall endeavour to bring the field on commercial production along with the existing partners in the Block,” ONGC said in a statement.

ONGC’s exploration efforts have resulted in the emergence of an HP-HT corridor of oil and gas in KG Basin. The Deen Dayal Field will play a pivotal role in developing nearby HP-HT discoveries in Yanam and Godavari PML areas of ONGC.

ONGC is India’s largest producer of crude oil and natural gas, contributing about 70% of the country’s domestic production.

The company’s market capitalisation as on December 23, 2016 was $36.47 billion. It produced 57.38 million approximately 57.38 million tonnes of oil and oil equivalent gas during the financial year 2015-16.