Gujarat State Petroleum Corp (GSPC) will buy entire output at a predetermined price from the KG Basin gas field that it has agreed to sell to Oil and Natural Gas Corp (ONGC) for $1billion, a key provision that addressed gas pricing concerns of India’s largest crude producer and helped seal the deal, senior executives at the two firms said.
“There is an initial understanding that we will support a particular price for five years,” said JN Singh, managing director of GSPC. “We have enough capacity in the system to absorb the gas from that field.”
Late last month, ONGC agreed to acquire the entire 80% participating interest of GSPC along with the operatorship in the Deen Dayal West field where geological challenges have delayed the commercial production by several years while mounting the Gujarat firm’s development cost and overall debt. Read More…
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