GSPCL to dig KG basin from April

GSPCL may go public next fiscal for funding main exploration

The Rs 500 crore Gujarat State Petroleum Corporation (GSPCL), which was earlier awarded the KG-OSN-2001/3 exploration block on the shelf part of Krishna-Godavari basin under NELP-III, will kick-off the initial phase of exploration from April.

Following the first phase, the feasibility report for understanding the reserve will be forwarded to the globally-reputed oil and gas research agency, Degoyler & McNaughtom for the final assessment.

Gujarat State Petroleum Corporation, which has decided to fund the initial phase of exploration through internal accruals, may also come out with an Initial Public Offering (IPO) during the first half of the next fiscal when the main exploration and production (E&P) activities are expected to begin.

"We are finalising the 16 global tenders which were earlier invited for various activities related to preliminary exploration in the block of KG basin.

"We are also optimistic of initiating the primary phase of exploration during this April.

"Following this we will finalise the major decision of hiring offshore oil rigs for exploration. A global tender has been invited for this also," said C K Koshy, chairman of the Corporation.

Koshy told Business Standard on Monday, "Though we are excited about the reserves, we will not talk about it before receiving the final assessment report from Degoyler & McNaughtom."

"We have decided to fund the expenses for the initial round of E&P activities in KG through internal accruals but once we get the certificate of an impressive reserve of oil and gas in this block, which is expected to come during June-July of this year, we may go for an Initial Public Offering for funding the rest of the exploration activities," Koshy said.

"The Corporation also may go for debt funding thus making a mix of debt and equity funding," he added.

Though Koshy denied to comment further on probable reserves in the block, an industry source said, "Based on the geo-scientific interpretation data, the block KG-OSN-2001/3 is one of the most prospective blocks in the region and thus, the probability of success of the block is very high.

"The success of surrounding blocks of Cairn Energy (Ravva) and Reliance, further ascertains the presence of prolific hydrocarbon reserves," the expert added.

Gujarat State Petroleum Corporation is also committed to developing six new small, discovered oil/gas fields viz. north Balol, Unawa, Dholasan, north Kathana, Kanawara & Allora, besides two exploration blocks in the state.

From its oil fields in Hazira, being jointly explored by GSPCL and Niko Resources, Canada, the Corporation at present receives 3.5 million standard cubic metre per day of gas which is expected to rise further.

Oil game plan

• GSPCL to fund the initial phase of exploration through internal accruals
• IPO before the main exploration and production
• The Corporation may go for debt funding
• Assessment of reserves of KG Basin to be done by Degoyler & McNaughtom