Gandhinagar

Gujarat government has refuted allegations against Gujarat govt company Gujarat State Petroleum Corporation(GSPC). Following is the statement of Finance Minister and Govt spokesperson Saurabh Patel translated from Gujarat

Those who describe the success of GSPC as wasted expenses lack understanding of petroleum exploration. And not just that but they hate self-reliance of country in the area of petroleum. Gujarat has emerged as one and only state that has created gas based economy. Through GSPC, Gujarat has laid huge gas grid and made gas for home and industrial usage available at doorstep.

Through GSPC, Gujarat has set an example in the area of petroleum exploration. Rs 19,716 crore investment by GSPC is not wasted expense but an attempt to make India self reliant in the area of petroleum. By criticizing such best effort, Congress has again demonstrated its anti- Gujarat mentality.

World’s 70% hydrocarbons are relatively more tough Mesozoic reserves. Entire world is looking for oil and gas search in such areas. In India, Mesozoic discovery is utilized in just 2% portion. The future of hydrocarbon search and production is based on such Mesozoic reserves. Even ONGC Chairman has said that it is necessary to take up exploration and development in such risky areas. GSPC selected such areas and took challenge to push ahead hydrocarbon search in the country. GSPC had participated in third round bidding of new exploration licensing policy. The company was allocated KG block in year 2003. Initially the area of this block was 1,850 square km in size. This is high pressure and high temperature field. Atmosphere is such that to perform the task in 5,000 meter depth of coastal area is difficult and challenging, but it was GSPC that came forward and conducted exploration in this area.

GSPC had conducted exploration in 13 wells and five appraisal in Andhra Pradesh’s Krishna Godavari basin after geological survey, 2D and 3D data observations and other tests. Success was achieved in 9 wells. This discovery was named as Deendayal. These reserves are recognized by globally renown consultant Gaffney, Cline & Associates. This is major discovery by GSPC. At the end of discovery, 493 sq km area was finalized as a block. It was decided that the first phase activities will be held in 17 sq km area which was named as Deendayal West. Through this discovery it is very clear that there’s huge volume of gas in this area. This discovery is one more success of GSPC.

The story doesn’t end here. In December – 2008, then UPA government’s Director General of Hydro Carbon recognized this project as financially viable project. Going one step ahead, Director General of Hydro Carban and the ministry of Petroleum and Gas under Congress-led UPA government in November 2009 approved the field development plan of this discovery. It shows that UPA govt had accepted the success of GSPC. GSPC’s investment of Rs 198,16 crore was made for exploration in entire area of KG Blocks and development of Deendayal West area was thus successful, note of which was taken by then Congress-led UPA government also.

Oil exploration is conducted in three phases. First is exploration phase, the second is appraisal phase, and the last one is production phase. At present, GSPC is in the second phase of project development. After implementation of field development plan, the total production capacity will be achieved. When GSPC is into the phase of production, it is unfortunate to allege that the expenses made were unnecessary and wastage. It also shows lack of understanding of gas exploration among those who make allegations.

In last five years, domestic production of gas has come down from 51,229 MMSCM to 32,693 MMSCM. If search for domestically available gas is not conducted, the country will have to depend only on import of foreign gas. To avoid such situation and to achieve self reliance, GSPC has for nation’s good conducted hydrocarbon discovery and production. Targeting the companies that are into risky and expensive tasks of exploration will cause damage to nation.

19 of 25 points in year 2010 performance audit by CAG were related to KG block. All these issues were settled after discussion in Public Accounts Committee.

Platform rig tender was awarded to Turf drilling. Spartan offshore drilling and BHL International were part of this consortium. They had necessary experience and knowledge for drilling rig. Also their offer was lowest(L1). As they didn’t start the work, their contract was canceled and bank deposit of Rs 15.54 crore was confiscated. This task was then given to L2 contractor at offer price of L1. Thus the state government has not suffered any loss.

GSPC had surrendered 37 and not 45 blocks out of total 65. The blocks that were found unsuccessful at the end of exploration were surrendered and this action had costed Rs 2,992 crore. This is normal in the area of gas exploration and production. The exploration cost settled in case of ONGC was Rs 48,000 crore while in case of Gail it was Rs 1800 crore. British Petroleum also got settled Rs 48,000 crore exploration cost.

The allegation pertaining to Rs 2,319.43 crore not collected from two joint venture partners Geo Global and Jubilant is baseless.

Geo Global company has not been paid a single penny from KG block. Rs 1,034.60 crore from its share contribution will be collected from sale of gas.

Jubilant offshore drilling private limited has paid Rs 1,420.94 crore to GSPC. Collection of rest amount of Rs 313 crore is in process from gas sale revenue.

GSPC conducts monitor in JV company as non operator. Out of 64 JVs GSPC has ONGC and Gail as partner in 30 JVs. This company undergoes internal/statutory/AG audit. GSPC participates in operating committee and management committee meetings of other 18 private companies. These companies undergo audit process through audit director general, Hydrocarbon appointed auditors. In addition to this, since 2010, GSPC has started using its power to conduct audit of non operator companies.

– DeshGujarat