ONGC board approves pact for stake in GSPC gas block

The board of state-owned ONGC has approved signing of a preliminary agreement for buying a stake in Gujarat government firm GSPC’s KG basin gas block.

The Board of Oil and Natural Gas Corporation (ONGC), at its meeting on September 8, approved signing of an MoU for taking a stake in Gujarat Petroleum Corporation’s (GSPC) difficult gas block, sources privy to the development said.

The MoU, strangely, also incorporates a dispute resolution wherein any differences over issues like valuation or natural gas reserves would be referred to a three-member committee of outside experts.

Sources said this is perhaps for the first time that an MoU sets out a dispute resolution committee and it perhaps is indication of the pitfalls that ONGC anticipates in buying a stake in the block. It has already differed with GSPC on the gas reserves the block holds and has appointed US-based consultant Ryder Scott to do an independent assessment.

ONGC initially was not keen to buy stake in the block as it felt the block had reserves far less than what GSPC was claiming and the asking price for the stake was not commensurate with the returns. But it has now agreed to look at the possibility and the MoU is a step further in that direction, they said. Ryder Scott Petroleum Consultants has been asked to evaluate gas properties in the block and independently certify the reserves quantities.

BPCL may eye more capacity at Kochi

Bharat Petroleum (BPCL), which expects to finish work on its 15.5-million tonne refinery expansion in Kochi by December and commission it in the fourth quarter, may look at further increasing its capacity to 22 million tonnes (MT).

“With land acquisition becoming one of the biggest hurdles in new projects, we may look at further increasing the Kochi capacity to 22 MT at a later stage as we have enough land there even after the ongoing Rs 16,5000 crore work,” BPCL Chairman and Managing Director S Varadarajan said, without offering a timeline or the quantum of investment.