'GSPC will be flexible' says MD Chakraborty
GSPC managing director Atanu Chakraborty has laid open the possibility of ceding operator control of the company's prized KG-OSN-2001/3 asset to a future strategic investor or partner.
"The important thing is the block should produce hydrocarbons and everyone's commercial interest is met," said Chakraborty, speaking exclusively to PETROWATCH. "It's important to be flexible." Eight years ago, adds Chakraborty, "the biggest mistake" GSPC made when negotiating (with BP, British Gas, Chevron and Eni) was to make its operator position non-negotiable.
If and when GSPC identifies a new strategic partner, he said, participation would be "more equity, less debt" so the company is not over-leveraged. "GSPC should not build more fixed cost into the system," he stressed, referring to the company's Rs20,000cr ($3bn) debt mountain that includes an estimated Rs6000cr ($900m) in 60-year perpetual bonds or 'perps'.
Chakraborty's comments come as GSPC struggles to begin commercial gas production from Deen Dayal West within KG-OSN-2001/3, missing repeated deadlines. One report suggests production from wells D1, D2 and D5 has steadily dropped from a high of 25m cf/d (708,000 cm/d) to around 3m cf/d (85,000 cm/d) today.
To reverse this GSPC is planning to frack a fourth well D4 at Deen Dayal West with help from Chiyoda group company Xodus. Also planned is submission to the DGH of a long-awaited Field Development Plan (FDP) for Deen Dayal East.
