GVK to go slow on oil and gas business
GVK Oil and Gas Ltd, GVK group's oil and natural gas exploration wing, will go slow on investing further into the development of seven deep-water blocks it has on the west coast due to inordinate delay in getting government clearances.
According to the latest annual report of GVK, the group which is primarily concentrating on the development of $10 billion coal project in Australia for its future energy security is disappointed with the Ministry of Defence's restriction on proceeding further with regard to some of the blocks.
The GVK-BHP Billiton consortium emerged as winners of seven deep-water exploration blocks off the West coast of India in the NELP VII. GVK holds 74 per cent stake, while BHP besides holding 26 per cent stake, acts as operator of all the blocks.
"While 2D over and under seismic data acquisition and processing are completed, the further exploration has hit a road block as some of these blocks are falling within the Jurisdiction of Ministry of Defence.
"Directorate of Hydrocarbons informed the consortium that the MOD is in the process of granting additional clearances for some of the blocks for proceeding further for exploration.
"As it is time-consuming, the group is of the firm view to wait and watch before infusing any further funds into this project," the report said.
The 2D over/under seismic data acquisition and processing in NELP VII blocks was completed by WesternGeco and Edcon, it added.
Of the seven blocks (MB-DWN-2005/2, MB-DWN-2005/3, MB-DWN-2005/4, MB-DWN-2005/5, MB-DWN-2005/7, MB-DWN-2005/9 and KK-DWN-2005/1) one is located in the Kerala-Konkan region and the rest of the six deep-water blocks off Mumbai.
The consortium may also look to rope in a partner once clear picture emerges from the MoD, the report indicated.
As per the latest balance sheet of GVK Oil and Gas, the company has employed Rs 173 crore towards capital work in progress.
A market analyst, who is tracking GVK, expressed inability to comment on the issue saying that the management has not provided any information on oil and gas business.
The government had in nine rounds of New Exploration and Licensing Policy (NELP) awarded 256 blocks to domestic and overseas explorers.
Of these, 52 blocks are stuck for want of clearances. Fifty-two blocks awarded under various rounds of NELP bidding, are pending for clearance by different organisations, such as Ministry of Defence, Ministry of Environment and Forest, international boundary disputes and state governments, the then Minister of State for Petroleum and Natural Gas R. P. N. Singh told Rajya Sabha last year.
