Thaindian News

Gandhinagar, May 28 (IANS) The Congress Friday charged the state public sector Gujarat State Petroleum Corporation (GSPC) with patronising a defaulting partner, GeoGlobal which owes it Rs.1,250 crore, and alleged the deal had “political ramifications”.
Addressing media persons in Ahmedabad, Congress state unit chief Siddharth Patel and Leader of the Opposition in the assembly Shaktisinh Gohil said the latest figures reveal GeoGlobal owes Rs.1,250 crore to the GSPC as on May 19.

“GSPC, which is now anytime coming out with an IPO to mop up Rs.3,500 crore from the public to fund its ambitious Deen Dayal block developmental projects, is in the dock as to why it is unabashedly patronising a defaulter, which is repeatedly refusing to pay its legitimate dues,” they said in a statement.

According to the Congress leaders, GeoGlobal Resources (India) was formed by Jean Paul Roy in Calgary (Canada) to participate with GSPC for the joint bidding for the Krishna-Godavari (KG) basin offshore block. In March 2002, GSPC inked a carried interest agreement with GeoGlobal, under which GSPC has to put up all funds required for the operations in the KG offshore block, including the share of GeoGlobal - all entirely at the risk of GSPC.

Geoglobal was deemed eligible for all benefits and profits accrued without sharing the risks, they said, citing the agreement.

GeoGlobal, however, contends it has no obligation to invest any money towards exploration or development of the KG basin offshore block for which production sharing contract was entered into between GSPC and GeoGlobal.

According to GeoGlobal, the exploration and development of KG basin block is to be done as per the agreement at complete risk and cost of GSPC and if they succeed, GeoGLobal would walk away with a handsome stake of 10 percent in the commercial proceeds but in the eventuality of GSPC not striking gas and the efforts proving worthless, GeoGlobal would not pay anything to GSPC.

In short, the production sharing contract(PSC) only guarantees GeoGlobal benefits arising from financial risk undertaken by GSPC and no obligations on part of GeoGlobal, they said, calling for an in-depth probe and charging that business association of GSPC with GeoGlobal “was a calculated ploy to grossly benefit a non entity at the cost of the tax payers and citizens of Gujarat”.

“Available evidence clearly indicate enormous benefits have been doled out to GeoGlobal for absolutely no reason or value contribution received or acknowledged by the GSPC,” they said.