Gujarat polls put GSPC's KG block stake sale on hold

Vol 11, PW 16 (13 Dec 07) People & Policy

Ongoing state elections in Gujarat have put a brake on GSPC’s plan to farm-out up to 30% at its eastern offshore KG Basin discovery block KG-OSN-2001/3.

Earlier this year GSPC consultant UBS Securities short-listed eight companies for the farm-out and set November 15 as the deadline to send in bids. “UBS has told all bidders that the entire process is on hold till after the elections,â€‌ reports a source.

Voting in Gujarat began on December 11, ending on December 16, with results announced by December 23. India’s opposition Bharatiya Janata Party rules Gujarat and chief minister Narendra Modi is campaigning for re-election, while the Congress party, which rules the country from Delhi, is trying its best to unseat him.

“Everything is at a standstill,â€‌ a GSPC source tells this report. “Till the election results are out don’t expect anything to happen about selecting a strategic partner.

If a new government comes to power the whole process could get jeopardised and we will have to begin all over again. That’s the dilemma we are in.

â€‌ GSPC closed the KG block online data room on November 30. Polls suggest a nail-biting finish, with the Congress party fighting hard to return to power after 17 years.

Gujarat bureaucrats have sensed the uncertain mood of voters and no longer give interviews. “We have been told by the Election Commission not to talk to the media, on or off the record, till December 23,â€‌ a top state bureaucrat tells this report.

Both sides have fielded their best campaigners in this hotly contested election. Chief minister Modi – the BJP’s star campaigner – is alternating between his typically unpleasant anti-Muslim rhetoric and an undeniably successful economic track record.

Gujarat is experiencing a mini economic boom, with an annual growth rate of 11%. Congress party chief Sonia Gandhi has been particularly sharp in her criticism of Modi’s Hindu fundamentalist credentials.

Of most interest is the fight between chief minister Modi and junior oil minister Dinsha Patel in the Maninagar constituency of Ahmedabad. Patel has publicly questioned Modi’s claim that GSPC’s KG block holds 20-tcf.

Oil and gas sector observers are keenly watching the Gujarat elections because if the BJP loses, Congress might reverse the decision to farm-out up to 30% stake in GSPC’s KG block.