Unsure ONGC commits to Deen Dayal deadline

Vol 20, PW 2 (06 Oct 16) People & Policy
     

DK Sarraf has reservations but in the next few months the ONGC chairman will be forced to agree a course of action over ONGC's farm-in at GSPC offshore KG-OSN-2001/3 block, which includes the Deen Dayal field.

GSPC sent ONGC a draft MoU outlining the farm-in terms in the week ending September 25 with both sides committing to a December 15 deadline to begin commercial negotiations. "The draft MoU will now be considered by both company Boards," confirms a source.

"Once approved the signed MoU will again have to be approved by their Boards." Much depends on a reserves report which consultant Ryder Scott is expected to submit to ONGC by October 15. "Based on the findings ONGC will decide the size of its stake and the price it will pay," we hear.

"If the deal goes ahead it'll happen only in 2017." Sarraf is believed to be worried about $2.8bn spent on the block by GSPC with little to show. But the oil ministry is determined to see the deal go ahead and he's unlikely to resist.

Encouragingly, an industry source adds that Deen Dayal, while undoubtedly a difficult field to operate, has huge potential. "If GSPC has 40 people to operate the field," says another source.

"ONGC has 400 and unlike GSPC it also has the technical knowledge and resources at its disposal with institutes like KDMIPE, IDT and IRS."