GSPC threat to spoil GeoGlobal's exit party

Vol 16, PW 10 (29 Nov 12) People & Policy
     

All is fair in love and war - and longstanding consortium disputes.

Canadian explorer GeoGlobal Resources wants a swift and painless exit from four onland Gujarat blocks where it partners GSPC: Sanand/Miroli, Tarapur, Ankleshwar, and Mehsana. But GSPC is determined to use the opportunity to win a Rs782.84cr ($140m) ‘carried interest’ row with GeoGlobal at shallow water Deen Dayal discovery block KG-OSN-2001/3.

“GeoGlobal wants to exit Gujarat but there’s a condition,” says GSPC. “It must pay us what it owes at Deen Dayal, or exit that too.

” Bad news for GeoGlobal, which has lined up fellow Calgary-based Fire Creek Resources to buy its 10% stake at 143-sq km NELP-IV onland Cambay block CB-ONN-2002/3 (Sanand/Miroli) and 448-sq km NELP-V block CB-ONN-2003/2 (Ankleshwar). Fire Creek has also begun due diligence to take GeoGlobal’s 20% stake at 784-sq km pre-NELP block CB-ON/2 or Tarapur.

No one seems interested in GSPC’s 10% stake at 94-sq km NELP-IV block CB-ONN-2002/2 (Mehsana). GeoGlobal wrote to GSPC in February saying it wants to quit the four blocks where it has spent $40m to date.

But GSPC insists a smooth exit depends on resolution of the KG row in its favour. “GeoGlobal can do whatever it wants,” adds GSPC.

“But we won’t budge.” GeoGlobal thinks GSPC is being unduly harsh.

“Our technical expertise led to the Deen Dayal gas discovery,” says GeoGlobal. “Back then GSPC had no drilling engineers.

Our founder ‘JP’ (Jean Paul Roy) went in person on the seismic survey. GSPC is now a big empire (sic) and doesn’t need us anymore.

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