GSPC sticks to KG find, Canadian ally plays it cool

The state-owned Gujarat State Petroleum Corporation (GSPC) has defended its natural gas find of over 20 trillion cubic feet (TCF) in the Krishna Godavari basin even as its Canadian partner, Geoglobal Resources, has downplayed the development. In fact, the Directorate General of Hydrocarbons (DGH) has also objected to the announcement before its official clearance.

"The assessment of 20 TCF of gas reserves in not an over-estimate. International experts who made the evaluation, pegged the quantity much higher and I believe as much as 85 per cent of the 20 TCF estimate is expected to be recoverable with the latest technology available with us," D J Pandian, managing director, GSPC told Business Standard on Wednesday.

The initial estimates of the find of 20 TCF by GSPC is more than that of Reliance Industries' 14 TCF in deep-sea waters in the KG basin and the Oil and Natural Gas Corporation's Bassein field, off the Mumbai coast, which had 10 TCF of proven reserves.

About its Canadian partner Geoglobal Resources downplaying GSPC's finding, Pandian said, "It is only because the stock of the company has soared to eight dollars from one dollar in a single day."

Geoglobal, a US-based publicly traded oil and gas company, holds 10 per cent stake in KG basin block KG-OSN-2001/3, while GSPC holds 80 per cent. The remaining 10 per cent in the block is held by Jubiliant Enpro.

According to GSPC, natural gas production from the block is expected to commence by December 2007 with an initial output of ten million standard cubic metres a day. The production is expected to rise to 80 million metric standard cubic metres per day (MMSCMD, even after ten years.