GSPC will choose one of two strategies for Deen Dayal

Vol 10, PW 23 (22 Mar 07) People & Policy

Gujarat State Petroleum will select either a strategic partner to develop its KG discovery or float an Initial Public Offering - but not both.

Last year GSPC began the process to select a â€کstrategic technology partner’ to farm out up to 30% of KG-OSN-2001/3. Banker UBS Securities shortlisted four companies: Chevron, Eni, BG and BP.

But the process has slowed amid rumours that both sides are having second thoughts. Matters have become confused since GSPC announced it might issue an Initial Public Offering of its shares and seek a listing on the stock exchange to raise around $1bn to finance exploration and development of the KG and other GSPC blocks.

Despite this, a well-placed GSPC source categorically denies that the company has lost interest in farming-out a portion of the KG block. “Our strategy is very clear,â€‌ he says.

“We should not call off talks with the (likely) strategic partners.â€‌ As of now, says GSPC, “all options are open.

We are pursuing the strategic partner and the IPO routes in parallel.â€‌ GSPC is clear that finally it will choose one or the other route.

“At one point we’ll have to take a decision,â€‌ we are told. “It cannot be both.

It has to be either the strategic partner or the IPO.â€‌ But that decision, says GSPC is “one or two months away.

â€‌ GSPC says it expects to receive the final data package of well KG#15 any day from its Houston-based consultant Petrotel. “Once we receive this we will go over it and then send it across to the bidders.

â€‌ Chevron, BG, BP and Eni have been impatiently waiting for this data package. Says a source in one of these companies: “Informally we’re aware of the KG#15 results, but nothing has come to us formally.

â€‌ He adds: “GSPC wants us to send in bids but we told them we don’t have enough data.â€‌ Continues our GSPC source: “We have already given information on the various parameters asked by the bidders.

At the end of the day, GSPC is interested in whoever or whatever brings value to the (KG) block.â€‌