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GeoGlobal Resources Inc. Message Board

slipperydevils 30 posts  |  Last Activity: Jun 2, 2016 9:24 AM Member since: Jun 7, 2005
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  • Financial Express June 2, 2016 9:15 AM

    While gas-in-place in the block is estimated at 14.4 tcf, sources privy to the negotiations told FE that ONGC is “not agreeable” to the recoverable reserves quoted by GSPC.

    ONGC has sought to almost halve the size of the gas assets deal it is negotiating with Gujarat government-owned GSPC, by arguing that the recoverable reserves at the latter’s deep-water block in the KG basin are far less than the presumed 7.6 trillion cubic feet (tcf) — probably not even half that. If ONGC’s contention holds sway, it would need to expend just $1-1.5 billion to pick up a majority stake in the 1,850 sq km block (KG-OSN-2001/3 block). The deal size was earlier touted to be between $2 billion and $2.5 billion.

    While a GSPC-led consortium has already spent close to R20,000 crore on the project including borrowing costs of nearly R6,000 crore, it does not have the funds needed to develop the block fully — estimates are it will need another $1.5 billion to develop the block’s Deen Dayal West (DDW) field, perhaps another $1 billion for DDW Extension and anywhere between $4 billion and $6 billion to develop other areas such as the Six Discoveries.

    While gas-in-place in the block is estimated at 14.4 tcf, sources privy to the negotiations told FE that ONGC is “not agreeable” to the recoverable reserves quoted by GSPC.

    “This is the toughest field currently being exploited in the country. Recovering more than 50% of the gas-in-place is indeed far-fetched,” said an official, requesting anonymity.

    GSPC has, however, stuck to the original estimates of recoverable reserves, which would mean that at the current gas price for difficult fields, the asset is worth some $50 billion, which could be monetised over 15-20 years.

  • slipperydevils by slipperydevils May 30, 2016 8:47 AM Flag

    Business Standard:

    State-owned ONGC is mulling buying a majority stake in GSPC's Krishna-Godavari basin gas block, which will help prevent the Gujarat government firm's Rs 19,500-crore loan from turning into an non-performing asset (NPA).

  • ONGC has gas discoveries in a neighbouring block and GSPC wants gas from those to be routed through its Deendayal block infrastructure for onward transportation to the shore. But the state¬owned firm said this was not technically feasible, as its KG¬D5 gas cannot be mixed with GSPC's gas which has high levels of sulphur and carbon dioxide content. Also it was highpressure and high¬temperature gas. Besides, the GSPC facilities on Deendayal field are about 60 km from the Cluster¬II gas fields in ONGC's KGDWN¬98/2 block and pumping gas that far was not feasible. Sources said ONGC said it was not costeffective to install compressors on the seabed to pump gas from its fields to GSPC facilities. GSPC's field is one of the most difficult fields in the world as cost of extracting gas would be around $12 per million British thermal unit, double the rate provided by the government currently, they said. The company has been producing 0.6 million standard cubic metres per day (mmscmd) of gas from the field as trial production for almost two years now.

  • Gas produced at KG Basin cannot be mixed with gas of GSPC Press

    Trust Of India | New Delhi May 29, 2016 Last Updated at 21:49 IST

    State ¬owned ONGC is mulling buying a majority stake in GSPC's Krishna¬Godavari basin gas block, which will help prevent the Gujarat government firm's Rs 19,500¬crore loan from turning into an non¬performing asset (NPA). Since the BJP¬led government came to power in the Centre, Gujarat State Petroleum Corp Ltd (GSPC) has been seeking to sell a majority stake in its KG¬OSN¬2001/3 (Deendayal) block in the Bay of Bengal to Oil and Natural Gas Corp (ONGC), sources said. GSPC was to begin gas production from the block in 2013 but after investing $3.6 billion, it was found that gas reserves were one¬tenth of the 20 trillion cubic feet claimed in 2005 and that it was technically difficult to produce. In the process it had amassed Rs 19,576 crore of debt, on which interest cost was Rs 1,804.06 crore in 2014¬15, according to the Comptroller and Auditor General. And against this, its revenue was Rs 152.51 crore in 2014¬15. Sources said GSPC has been doing trial production of a very small volume of gas from August 4, 2014, and has not yet reached commercial production. In the absence of revenue commensurate with the debt servicing obligations, it risks becoming a defaulter. To bail out of the situation, a few weeks back it offered to sell 50 per cent stake to ONGC, they said. Money from ONGC can repay a part of the debt and the remaining would become a joint liability of the two companies. Sources said GSPC also wanted ONGC to use its under¬sea infrastructure for a fee.

  • slipperydevils by slipperydevils May 27, 2016 5:45 AM Flag

    Dinesh Sarraf is ONGC's chairman:

    Sarraf declined comment on whether ONGC was in talks to acquire Gujarat State Petroleum Corporation (GSPC) or its key project in the KG basin off the eastern coast.

  • slipperydevils slipperydevils May 24, 2016 6:33 AM Flag

    Here are the key challenges faced by
    GSPC:

    1) Technical difficulties:
    The block, which was meant to go on stream by the end of 2011, has seen delays over technical issues, according to a GSPC executive. The Krishna­Godavari Deen Dayal West (KG­DDW) discovery, part of the larger Deendayal Upadhyaya block, has seen the company grapple with having to drill 5,000 metres below the sea­bed. Developed by GSPC at a depth of 5,000 metres below the sea bed, wells drilled in DDW fall in the high pressure and high temperature (HPHT) category with temperature of 400 degree Fahrenheit and pressure of 12,000 PSI. The company is trying out hydraulic fracturing, also known as Hydrofracking, in order to overcome the technical challenges.

    2) CAG says prospects uncertain: The Comptroller and Auditor General (CAG) has called into question GSPC's investment of Rs 19,576 crore in its KG block project, saying "future prospects" of the block remain shrouded in "uncertainty". Additionally, CAG, in its report tabled before the Gujarat Assembly in April this year, painted a gloomy picture of GSPC's finances, as its borrowing stood at Rs 19,716 crore as of March 2015, a jump of 177% since 2011.

  • Business Standard
    BS Web Team | New Delhi May 24, 2016 Last Updated at 14:11 IST

    Gujarat State Petroleum Corporation Limited's (GSPC's) struggles continue as it is yet to begin full commercial
    production from the KG­OSN­2001/3 block, christened as Deendayal Upadhyaya block after the Bharatiya Jan Sangh leader, and as its debt for 2014­15 stands at over Rs 20,000 crore.

    The KG­OSN­2001/3 block, which was once touted as the "biggest ever" natural gas discovery in the Krishna Godavari (KG) basin, was awarded to GSPC in the third round of auctions held under the new exploration and licensing policy (NELP) in 2003. With 80% interest, GSPC is the operator of this particular block, while Canada's GeoGlobal Resources and Jubilant Energy, part of the Jubilant Bhartia Group, hold 10% each.

    Meanwhile, the Congress has sought a judicial probe into alleged irregularities of Rs 20,000 crore in the GSPC.

  • May 04: That GSPC is in trouble is borne out by the fact that it has cut its E&P investment by 40% at a time when it needed to step it up to stabilize production in its Deendayal field in the KG basin.

    The field's geological structure is highly complicated. High pressure and high temperature reserves is one problem. The other is that the tight oil formations in the field require multiple drilling and fracturing to sustain production.

    With little revenue coming in, the company seems to have been pushed into a corner with its loan overhang even as it faces a higher investment requirement.

    A salvage operation has to be launched.

    But with the opposition demanding an investigation into the company, who is going to bell the cat?

    In the meanwhile, of the two blocks, KG-OSN-2001/3 -- in which the Deendayal field is located -- and KG-ONN-2004/2 in KG basin, it is relinquishing the latter.

    Indianpetro

  • slipperydevils by slipperydevils Apr 28, 2016 5:55 AM Flag

    It is unwise on the part of Jairam Ramesh and Anand Sharma to choose to attack an efficient PSE and on patently unfounded grounds

    By: Rajiv Kumar | Published: April 27, 2016 5:34 AM

    The Congress party is desperate to stick some corruption scandal on the Prime Minister, thereby eroding his credibility and capacity to govern. This is the age-old ‘crab tactic’ in Indian politics, of pulling everyone down to one’s low level. Chandra Shekhar, the former Prime Minister, was apparently fond of asserting that all politicians were equally steeped in corruption (is hamam mein sab nange hain). This ensured that all were tarred by the same black brush, and absolved of all accountability and made equally culpable. I did not expect such cynical behaviour from people I have known rather well, but clearly not well enough!

    This seems to be the only explicable motive in recent attempts by senior Congress party stalwarts like Jairam Ramesh and Anand Sharma (RS), who respectively wrote a long oped article (The Hindu, April 18) and addressed a press conference (April 6) on the so-called KG Basin scam. This was allegedly committed by the Gujarat State Petroleum Corporation (GSPC) over more than 12 long years (2003 to 2015). The Congress leadership is reportedly also seeking to move the Supreme Court through a PIL on the issue and has demanded a joint business committee (JBC) of Parliament to look into the matter.

  • Apr 27: On hindsight it is easy to blame a faulty business and design model for the fiasco.

    To begin with, GSPC had agreed to "carry" the 10% interest of the little known Barbados-incorporated GeoGlobal Resources in return for technical help for the block. The company had partnered GSPC not just in the KG-OSN-2001/3 block but also in the CB-ONN-2002/3, CB-ONN-2003/2 and the Tarapur (CB-ON/2) blocks.

    But then RIL can also be faulted for collaborating with the now bankrupt Niko in the KG Basin. At that point in time, the Indian hydrocarbon industry did not attract the big guns of the global oil and gas industry, and local companies were forced to tie up with the likes of Niko and GeoGlobal for technical expertise.

    The point to note is that while Modi was the chief minister, GSPC's relationship with GeoGlobal turned sour. The latter was refused its share of profit petroleum from the Tarapur block.

    Then again, GSPC refused to "carry" GeoGlobal's interest in the KG Basin block on the ground that its partner refused to honour cash calls even though the terms of the deal between the two was for GSPC to "carry" the stake under all circumstances.

    It is quite evident that Modi and GSPC were angry at having to "carry" GeoGlobal's 10% PI without the attendant technological support from it.

    The Congress government, sensing an opportunity to hit back at Modi, ruled in favour of GeoGlobal's right to be permanently "carried", claiming that the PSC did not allow for a change of equity under the conditions cited by GSPC.

    While GSPC may have erred in the choice of its partner, the fact that the relationship fell apart upon GeoGlobal's inability to deliver on its promise can be taken as a testimony of the lack of any underhand quid pro quo when the partnership was first established.

  • Reply to

    Indianpetro

    by slipperydevils Apr 27, 2016 6:18 AM
    slipperydevils slipperydevils Apr 27, 2016 6:55 AM Flag

    And this website believes that only a collaboration model -- where promoters of all adjacent blocks (which includes ONGC in one, the formidable RIL-BP combine in another and GSPC in the Deendayal field) work in tandem -- provides hope for the salvation of the GSPC block.

  • Reply to

    Indianpetro

    by slipperydevils Apr 27, 2016 6:18 AM
    slipperydevils slipperydevils Apr 27, 2016 6:44 AM Flag

    But then RIL can also be faulted for collaborating with the now bankrupt Niko in the KG Basin. At that point in time, the Indian hydrocarbon industry did not attract the big guns of the global oil and gas industry, and local companies were forced to tie up with the likes of Niko and GeoGlobal for technical expertise.

  • Reply to

    Indianpetro

    by slipperydevils Apr 27, 2016 6:18 AM
    slipperydevils slipperydevils Apr 27, 2016 6:42 AM Flag

    The point to note is that while Modi was the chief minister, GSs relationship with GeoGlobal turned sour. The latter was refused its share of profit petroleum from the Tarapur block.

  • slipperydevils by slipperydevils Apr 27, 2016 6:18 AM Flag

    Indianpetro has dedicated today's posting to GSPC/GGR & Deen Dayal. Unfortunately Yahoo is blocking my posts.

  • Apr 27: Prime Minister Narender Modi is under attack for GSPC's debacle in the KG Basin.

    The total investment getting the Deendayal field to full production is estimated to cost around $ 4 billion. And yet the end result will be a gas production of a mere 5 mmscmd.

    At the gas price now prevalent for High Pressure High Temperature fields, this investment is unlikely to be recouped.

    The website would not like to comment on the politics behind the investment as it is outside the ambit of this analysis.

    One conclusion however is evident: that a cash strapped GSPC is not in a position anymore to handle the complicated geology of the field. Even when the going was good, the company did not have the competence. More so now, with gas prices plunging and the geology turning more intransigent to conventional hydro fracturing procedures.

    The equipment deployed is proving to be insufficient to handle bottomhole fluid temperatures, which are as high as 460 degree Fahrenheit.

    What makes it more difficult is that the field contains many faults and GSPC does not have the wherewithal anymore to drill multiple horizontal wells to sustain production.

    Then again, permeability and porosity are low, and due to this reason, the recovery factor is difficult to pull up even after hydro fracturing techniques are utilized

    The sulphur in the natural gas is more than the normal level, so production and processing facilities will have to withstand high sulphur content in natural gas

    It will take GSPC a long time to ramp up production to the 5 mmscmd level.

    In its FDP too, the company had projected a slow ramp up, from 0.8 mmscmd, going up to 1.6 mmscmd, then on to 3.5 msmcmd and finally to 5 mmscmd in the third year.

    Production was meant to have started in December, 2013 but began much later in 2015. All deadlines are currently running well behind schedule.

  • Apr 25: GSPC is planning to drill two wells and set up equivalent surface production facilities in its CB-ONN-2003/2 block.

    These are producer wells and production is expected to be in the range of 3-5 scm and 5-7 scm per day respectively.

    The exact break-up of crude and associated gas production is given here.

    Indianpetro

  • The stock of GEOGLOBAL RESOURCES (OTCMKTS:GGLR) registered a decrease of 88.19% in short interest. GGLR’s total short interest was 1,500 shares in April as published by FINRA. Its down 88.19% from 12,700 shares, reported previously. The stock decreased 18.18% or $0.002 on April 15, hitting $0.009. About 95,200 shares traded hands or 257.73% up from the average. GeoGlobal Resources Inc. (OTCMKTS:GGLR) has declined 50.00% since September 10, 2015 and is down trending. It has under performed by 56.58% the
    S&P500.

    Riverside Gazette
    April 20,2016

  • Reply to

    My Analysis of DDW

    by superhead55 Apr 13, 2016 11:47 PM
    slipperydevils slipperydevils Apr 14, 2016 9:13 AM Flag

    The last publications show that ILDC, not JPR, has the controlling interest in GGR. All indications are that ILDC is no longer active in E&P and will sit, wait and hope for the best in India.

    IMO ILDC's and JPR's strategies coincide for the reasons already posted on this board.

    A concern is that once GGR's value increases a play such as Chapter 7/buyback, reverse takeover or flat out steal (Key Capital) may be tried. Let's hope we have such concerns.

  • slipperydevils slipperydevils Apr 13, 2016 6:43 PM Flag

    I've tried several different ways to post. Yahoo keeps deleting the posts. It's been happening quite frequently.

    The gist of the article is that GSPC enhanced it's value to bid on the block, they were not qualified to operate the block and they should have brought in a knowledgeable 3rd party. Cost overruns are common in the industry and Modi's political opposition is jumping all over it.

  • Great article by The Wire but Yahoo continues to kick out my posts.

    Google What Went Wrong with Gujarat’s KG ‘Deen-Dayal’ Gas Reserve Discovery?