Gujarat State Petroleum Corp (GSPC) has incurred a net loss of Rs 804.42 crore in the fiscal year ended March 31 as it wrote off exploration expenditure.
GSPC, an unlisted Gujarat government entity, did not provide corresponding numbers for 2014-15.
The loss in 2015-16 was "mainly due to extraordinary items such as writing-off of exploration expenditures and impairment carried out in accordance with accounting standards," GSPC said in a statement.
As much as Rs 1,181.62 crore was attributable to these extraordinary items.
"The company wrote off an amount of Rs 686.88 crore pertaining to domestic exploration activities while an amount of Rs 97.39 crore was written off as diminution in investment in its subsidiary - GSPC JPDA that was partner in an Australian Block," it said.
GSPC owns the Krishna Godavari basin Deendayal gas block where it has sunk in USD 3.6 billion and taken about Rs 19,500 crore of debt. It started test production from the block in 2014 but is yet to begin commercial output.
The company recorded income from operations of Rs 10,607.30 crore on a standalone basis as against Rs 10,946,30 crore in the previous year.
"The decrease in total revenues and operating profits compared to previous year is mainly attributable to heavily skewed margins in the gas trading segment due to global meltdown in crude prices during the year," the statement quoted J N Singh, Managing Director, GSPC as saying.
GSPC said it is "sparing no effort for bringing its KG Block's Deendayal West Field on commercial production mode."
The field, it said, is technologically challenging with characteristics such as high pressure, high temperature (HPHT) and low permeability.
"After having completed first three wells on conventional perforation methods, the company has carried out successful hydro-fracturing in its fourth well," the statement said.
Hydro-fracturing is a well stimulation technique in which the well-rock is fractured by a pressurised liquid. It involves high pressure injection of 'fracking fluid' into a wellbore to create cracks in the deep-rock formations, through which natural gas will flow more freely.
"It is first time in India that the hydro-fracturing technology was used in the HPHT offshore environment at a depth of 5,000 meters below sea bed," it said adding globally renowned firms such as Halliburton, Barry & Associate, E-frac and Xodus were employed for the activities.
The company carried out four stages of hydro-fracturing in fourth well at a pressure of 13,000 PSI (i.E. Approx 900 times more than the atmospheric pressure) and has successfully pumped proppants in the HF zones. The well is under cleanup and testing.
"The successful completion of the HF process is expected to significantly increase production from the DDW field," the statement added.
