State-owned Oil and Natural Gas Corp (ONGC) has won government approval for the acquisition of Gujarat State Petroleum Corp's entire 80 per cent holding in a KG basin gas block for Rs 7,738 crore, news agency PTI reported on Friday.
ONGC had in December last year agreed to buy entire 80 per cent interest in GSPC along with operatorship rights, in Deen Dayal West (DDW) gas field in Block KG-OSN-2001/3 of the Bay of Bengal for $995 million (Rs 6,443 crore).
The company will also pay a part consideration of $200 million (Rs 1,295 crore) to GSPC towards acquisition rights for discoveries other than DDW field in the block, the report said.
"A farm-in agreement was signed with GSPC on March 10, 2017 with economic data of March 31, 2017," the report said, quoting from ONGC's notes to its first quarter earning disclosure.
During the April-June quarter of fiscal 2018, "Government of India has approved the acquisition of entire 80 per cent participating interest of GSPC along with operatorship rights," the notes said, adding that ONGC will make payments to GSPC "on fulfilment of certain conditions precedent".
A company official said the deal is likely to be closed within one month.
The PTI report said that ONGC will pay $995.26 million for three discoveries in the KG-OSN-2001/3 block that are under trial production since August 2014. Another $200 million will be paid for six other discoveries for which GSPC has been finalising an investment plan to bring them to production.
Jubilant Offshore Drilling Pvt Ltd and Geo Global Resources (India) Inc hold 10 per cent stake in the block.
GSPC had originally offered ONGC its 50 per cent stake in the block together with operatorship, but the state-owned firm was not interested. Subsequently, GSPC offered its entire 80 per cent stake in the block and ONGC on December 23 last year, the report said.
GSPC held debt of Rs 19,716.27 crore as on March 31, 2015. It has so far made 9 gas discoveries in the Bay of Bengal block. Of these, three -- KG-08, KG-17, KG-15 commonly known as Deendayal West (DDW) fields -- have been approved for development.
