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NOV 21 2016

Talks with ONGC to sell KG gas block 'purely commercial': GSPC

  • Economic Times, ET Bureau / Hyderabad
  • Created: Mon 21st NOV 2016

Rebutting Congress' charge of a Rs 20,000-crore scam in alleged forced purchase of GSPC by ONGC, the Gujarat government firm today said discussions between the two firms are taking place on purely commercial basis with a view to achieve business synergies.

Congress spokesman Jairam Ramesh had on Tuesday alleged that Petroleum Minister Dharmendra Pradhan is "forcing" state-owned Oil and Natural Gas Corp (ONGC) to buy Gujarat State Petroleum Corp's (GSPC) gas block in KG basin to "protect" Prime Minister Narendra Modi.

"The discussions between the two companies are taking place on purely commercial basis. The objective being to achieve business synergy between the resources of ONGC and GSPC for achieving more domestic production of oil and natural gas by carrying out further development of GSPC's KG Block," the Gujarat company said in a statement.

ONGC, it said, also operates an adjoining block in the KG basin which is due for development where the technological break-through achieved by GSPC in its KG Block can be of immense help for expediting the development.

Ramesh had alleged that Pradhan has ordered a "surgical strike" on GSPC through ONGC as the Gujarat government undertaking owes Rs 20,000 crore to 15 banks.

Denying Congress' charge that an attempt was being made to hide a scam, GSPC said: "The acquisition of stake by ONGC into GSPC's KG Block is meant for achieving synergy for securing energy security for India."

GSPC said the loans advanced by the banks to it were done after "proper assessment" by lenders.

"In fact GSPC had availed services of SBI Capital Markets (a subsidiary of SBI - a Government of India undertaking) for arranging the loan financing for GSPC. SBI Caps has also assisted the banks in evaluation before lending funds to GSPC.

"The proposals for lending to GSPC were cleared by the Board of Directors of the respective lending banks during the tenure of UPA government," it said. GSPC, the statement said, has always carried out timely servicing of its loans. "GSPC has never ever defaulted even for a day in servicing its loans," it said.

Ramesh had alleged that there have been four CAG reports on GSPC scam, and yet there have been no comments from the government on them. He alleged that Modi as Gujarat chief minister had made GSPC borrow Rs 20,000 crore after claiming in 2005 that it has found 20 trillion cubic feet (tcf) of gas reserves.

"After 11 years, they have found only 1 tcf of gas," he claimed adding GSPC has "squandered" the money and is "bankrupt" and therefore unable to repay.

GSPC said all the comments of the CAG pertaining to it and its operations have been tabled before the Gujarat Legislative Assembly and the reports have been discussed in the Public Undertakings Committee.


Gujarat Comptroller and Auditor General Gas Natural Gas Oil ONGC Energy Security Energy Petroleum India SBI ongc

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