Lenders claim GSPC profits from KG gas

Vol 17, PW 18 (24 Apr 14) News in Brief

When GSPC eventually begins first gas production from its Deen Dayal West field on the east coast it will have to pass on its profits directly to 21 banks.

After piling up debt worth Rs10,679cr ($1.8bn) by March 31, 2013, GSPC has assigned all of its 80% share of production in shallow water block KG-OSN-2001/3 to three separate banking consortia. “The lenders will have a primary charge (sic) on GSPC’s share of cash flow from KG-OSN-2001/3,” reads a note in GSPC's bulky 448 page 34th annual report for fiscal 2012-13, due to be tabled in the monsoon session of the Gujarat Assembly in June or July.

Asked when production might begin, an angry GSPC manager snapped: “Please don’t ask this.” Internal assessments put the date somewhere in the last quarter of this year.

GSPC conducted a ‘price discovery’ exercise for the initial expected flow of 2.32m cm/d with 37 companies in February last year, yielding a price of $14.2/mmbtu.