Modi's secret attempt to end GeoGlobal row

Vol 15, PW 10 (17 Nov 11) People & Policy

Gujarat chief minister Narendra Modi held a secret meeting on November 5 with Canada’s minister for international trade Edward Fast at his Sachivalaya Block 1 office in Gandhinagar.

PETROWATCH learns Modi is seeking Canada’s help in finding a solution to the longstanding $150m ‘carried interest’ dispute between GSPC and Canadian explorer GeoGlobal Resources, partners at the Deen Dayal discovery block KG-OSN-2001/3. “Modi met Fast to get clarity on the dispute and find a way forward at governmental level,” says a senior Gandhinagar source.

“They want a compromise acceptable to all parties involved.” No press release on the meeting was issued by Gujarat’s information department, and an official Gujarat spokesperson contacted by this report denied any knowledge of it.

Nor did the Canadian minister’s office make any mention of the Modi meeting in a press note released on his week-long visit to four Indian cities. “Modi organised the meeting late in the evening so most offices were closed for the day and local journalists were no longer around,” explains our source.

“It began at 7pm and continued for 45 minutes.” Modi had earlier been briefed on the dispute by GeoGlobal’s Indian representative, we learn.

But only his principal secretary K. Kailashnathan, a senior civil service officer, was allowed to attend the meeting with Fast.

GSPC managing director Tapan Ray could not attend as he is in the US on a study break at Columbia University. GSPC wants GeoGlobal to pay around $150m or 10% of the total $1.5bn spent on exploration at Deen Dayal to date, in line with GeoGlobal’s 10% stake in the block.

GeoGlobal contests this demand, citing a Carried Interest Agreement signed between the two companies in 2002, which states in black and white that it must be ‘carried’ for its share of exploration costs.