State-owned ONGC is mulling buying majority stake in GSPC’s Krishna Godavari basin gas block which will help prevent the Gujarat government firm’s Rs.19,500 crore loan from turning into a non-performing asset (NPA).
Since the BJP-led government took power in the Centre, Gujarat State Petroleum Corp Ltd (GSPC) is seeking to sell a majority stake in its KG-OSN-2001/3 (Deendayal) block in Bay of Bengal to Oil and Natural Gas Corp (ONGC), officials said. GSPC was to begin gas production from the block in 2013 but after sinking in $3.6 billion it was found that gas reserves are one-tenth of 20 trillion cubic feet claimed in 2005 and that too is technically difficult to produce. In the process it has amassed Rs.19,576 crore of debt, on which interest cost was Rs.1,804.06 crore in 2014-15, according to the CAG. And against this its revenue wasRs.152.51 crore in 2014-15.