ONGC initially was not keen to buy stake in the block as it felt the block had reserves far less than what GSPC was claiming and the asking price for the stake was not commensurate with the returns. New Delhi: State-owned ONGC has hired US-based consultant Ryder Scott to assess natural gas reserves in Gujarat State Petroleum Corp’s (GSPC) Deendayal block before deciding to buy a stake in it. “There is tremendous amount of pressure on ONGC to buy stake in GSPC block,” a person with direct knowledge of the matter said. “Being a commercial organisation, it cannot throw away money so it has now decided to get the reserves in the GSPC block validated.” Ryder Scott Petroleum Consultants has been asked to evaluate gas properties in the GSPC block and independently certify the reserves quantities, the person said. GSPC was to begin gas production from the block in 2013 but after sinking in $3.6 billion it was found that gas reserves are one-tenth of 20 trillion cubic feet claimed in 2005 and that too is technically difficult to produce.

Source: Mint August 28, 2016 16:30 UTC