GSPC needs $2.16bn for Deen Dayal West
GSPC has officially postponed its deadline to begin producing 2.32m cm/d at Deen Dayal West from July (this month) to “sometime before” March 31, 2014.
GSPC announced the new deadline in a two-page entry in a 503-page document compiled by the Gujarat state government titled: ‘Development Programme 2013-14 Sector Profile,' published this month (July). GSPC also states it desperately needs Rs12,952cr ($2.16bn) over three fiscal years (2013-14, 2014-15, 2015-16) for development and appraisal work at its eastern offshore block KG-OSN-2001/3, which holds Deen Dayal West.
GSPC hopes to raise this money through private equity and Gujarat government funding. "It is necessary that Gujarat infuses enough equity into the company for crucial development activities at Deen Dayal West so the funding gap is met and commercial production begins," writes GSPC.
"Gujarat government funding would boost investor confidence in the project and attract equity from private sources or through an Initial Public Offering." Gujarat authorities have already invested Rs1200cr ($201m) in GSPC this fiscal (2013-14).
Of this, Rs500cr ($84m) is classified as 'budgetary outlay' while Rs700cr ($117) is 'additional budgetary outlay.' GSPC previously raised Rs1040cr ($174m) in December 2009 by placing 5% equity with seven Gujarat government-owned companies and three institutional investors: SBI Caps, Industrial Development Bank of India (IDBI) and Industrial Finance Corporation of India (IFCI). “We have government permission to dilute up to 15% of our equity,” says a GSPC source.
GSPC (80%) shares KG-OSN-2001/3 with GeoGlobal Resources (10%) and AIM-listed Jubilant Energy (10%).