GeoGlobal refused permission to assign 5% of KG block

Vol 7, PW 20 (17 Dec 03) News in Brief

Last month, the oil ministry turned down a request by GeoGlobal Resources of Canada to assign part of its 10% stake in NELP-III block KG-OSN-2001/3 to a subsidiary company.

PETROWATCH learns GeoGlobal chief financial officer Allan Kent wrote to the oil ministry in October seeking permission to assign 5% of the companys 10% participating interest to wholly owned subsidiary Roy Group (Mauritius). Under Article 28.7 of the production sharing contract, no company is allowed to hold less than 10% participating interest, we are told.

Since they want to reduce their stake from 10% to 5%, we cannot agree to their proposal. The PSC for this 1,850-sq km block, where Gujarat State Petroleum has 80% and Jubilant Enpro has 10%, was signed on 4th February this year.

GSPC will carry GeoGlobal during the exploration phase. KG-OSN-2001/3 sits next door to Reliances 8.6tcf discovery at KG-DWN-98/3.