DK Sarraf worries about GeoGlobal

Vol 19, PW 16 (21 Apr 16) News in Brief

Number cruncher DK Sarraf wants to know what will happen to GSPC's never-ending carried interest dispute with estranged Canadian partner GeoGlobal Resources if ONGC gives in to oil ministry pressure and takes over the Deen Dayal gasfield.

ONGC chairman Sarraf wants GSPC to clarify what role GeoGlobal will play at the block if the transfer to ONGC goes through. He is right to be worried.

GSPC has sunk more than $2.6bn into the KG-OSN-2001/3 block which holds Deen Dayal with little to show. Worse, unrecovered dues from GeoGlobal for its share of the costs rose from Rs1613.32cr ($243m) on March 31, 2014 to Rs1734.60cr ($261m) by March 31, 2015.

Cash-strapped GeoGlobal's arrangement with GSPC is that these costs are to be recovered from production but production is nowhere in sight. "We don't want GeoGlobal either," says a senior GSPC source.

"Almost six years ago on August 18, 2010 we wrote them a termination letter." But GSPC can't do more: any termination needs an amendment to the PSC approved by the DGH and the ministry, a lengthy process.

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