Gujarat State Petroleum Corporation (GSPC) has put on hold its planned initial public offer due to choppy market conditions and would instead raise debt to finance development of its eastern offshore Krishna-Godavari basin gas finds.
GSPC plans to invest over Rs 5,000 crore in developing the eastern offshore gas finds that it believes hold a minimum of 1.4 trillion cubic feet (tcf) of in-place reserves and a maximum of 5.6 tcf reserves.
"We are awaiting formal communication from the Government declaring our finds as commercially viable. Once we receive that we will submit a plan to development discoveries," GSPC Managing Director D J Pandian told reporters here.
GPSC believes it will take two years from the date all approvals are in place, including the one for development plan, which details investments and volumes to be produced, for starting production from the block KG-OSN-2001/3 off the Andhra coast.
"As (Gujarat) Chief Minister (Narendra Modi) has already stated, the IPO is not being considered now," he said indicating the public offering may be made when the gas production starts.
GSPC, he said, would fund the development plan from its internal resources and borrowings. "Many banks and financial institutions will be willing to finance us once development plan is approved."
The company had in July struck more gas reserves in the KG-22 well, which in Modi's assessment alone has three tcf of reserves. The development plan under preparation is for earlier find in KG-8 well in June 2005.
