Indian Stock Market

Gujarat State Petroleum Corp will invest USD one billion (about Rs 4,100 crore) in bringing to production its eastern offshore Krishna Godavari basin gas field by 2011 and may go for an initial public offering to fund part of the investment. GSPC, which is close to receiving Government approvals for development plans for KG-8 gas field, has struck more gas in the block KG-OSN-2001/3, Gujarat Chief Minister Narendra Modi announced from the discovery well KG-22 in Bay of Bengal. “KG-22 alone holds three Trillion cubic feet (Tcf) of gas,” he said adding the entire block in his assessment holds more than 20 Tcf reserves. From 2011, GSPC will pump 8-10 million standard cubic meters per day of gas from the block where they made the first of the five gas discoveries in June 2005 in KG-8 well. “We have taken capacity in Reliance Industries’ East-West (Kakinada to Baruch) pipeline to transport gas to Gujarat,” Gujarat Energy Minister Saurabh Patel said. KG-8, according to the development plan submitted to oil regulator DGH, holds a minimum of 2.6 Tcf and a maximum of 5.6 Tcf recoverable reserves and can produce about 6 mmscmd gas. Patel said the state government, which owns 100 per cent in GSPC, had put on back burner plans to sell 30 per cent stake to a foreign strategic partner like Chevron Corp, and was contemplating an IPO by December. “Merchant bankers are looking at IPO… in no condition we are going to dilute more than 20 per cent equity. However, no decision has been taken and it will depend on market conditions and our internal accruals,” he said. Modi, however, countered Patel saying there were no plans for an IPO. “We are a surplus state and do not need any financial support. We are financially sound and do not need to go to market.”