ONGC to buy 80 pc stake in GSPC’s KG Block at $995.26 mn

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New Delhi, December 24
State-owned Oil and Natural Gas Corporation (ONGC) today said that it will buy 80 per cent stake of Gujarat State Petroleum Corporation Ltd (GSPC) in Krishna Godavari (KG) Basin offshore at 995.26 million dollars. “ONGC Board today considered the proposal and approved acquisition of the entire 80 per cent Participating Interest (PI) of GSPC along with operatorship rights, at a purchase consideration of 995.26 million dollars for DeenDayal West Field in the Block, ONGC said in a statement. GSPC has already built significant production facilities like 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.
ONGC shall also pay part consideration of 200 million dollars to GSPC towards future consideration for six discoveries other than DeenDayal West Field, which will be adjusted upon valuation of the these discoveries subsequent to approval their Field Development Plans by DGH/Management Committee of the Block, it added.
The transaction would be documented by signing a Farm-in Agreement with GSPC. Requisite approval from the Government will be sought by GSPC in accordance with provisions of Production Sharing Contract of the Block, it said.
The trial gas production from DeenDayal West Field has already begun.
Upon successful completion of the transaction, ONGC shall endeavour to bring the field on commercial production along with the existing partners
in the Block.
The engagement between ONGC and GSPC has set a pioneering example of synergy of strategies of government owned companies in upstream sector of oil & gas industry.

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