Sun returns DSF-1 block blaming misleading data

Vol 22, PW 15 (16 May 19) Exploration & Production

Billionaire Sun Petrochemicals boss Dilip Shanghvi is learning the hard way you can't always trust DGH and ONGC data when bidding for oil and gas blocks.

This report learns Sun believes it was misled with unrealistic data and now wants to relinquish the offshore Mumbai MB/OSDSF/B-37/2016 cluster fields won under DSF-1. A team from Sun visited the DGH on May 3 to submit a letter confirming its decision to surrender the block.

"Yes its true," confirms a senior Sun source on May 6. "We have just submitted the application but it is yet to be approved."

Sun puts the blame squarely on misleading DGH and ONGC data. "We studied the data before submitting the bid," adds our source.

"But we had doubts on the (reserves) figure we were given. That’s why we didn't commit to drill any wells."

After Sun geologists studied the data they noticed a significant discrepancy between the DGH/ONGC reserves projections and reality. "I don’t have the exact numbers with me because I am out of the office," says our Sun source.

"But you can say the DGH added an extra zero to the figures. To be sure we hired an external agency (CGG) to verify our numbers.

When they confirmed what we suspected we surrendered the field." Sun is confident the DGH will be convinced by its arguments and return its Rs2cr ($286,000) bid bond.