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 Corp (ONGC) at its meeting on September 8 approved signing of an MoU for taking a stake in Gujarat Petroleum Corp Ltd’s (GSPC) difficult gas block, sources privy to the development said. The MoU approved 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 a memorandum of understanding (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.