Assembly panel slams GSPC over Rs 500-cr loss in KG Basin block

Ahmedabad Mirror | 4 days ago | 23-09-2022 | 06:00 am

Assembly panel slams GSPC over Rs 500-cr loss in KG Basin block

The Public Enterprise Committee of Gujarat Assembly has come down heavily on the Gujarat State Petroleum Corporation (GSPC) over a loss of nearly Rs 500 crore in a drilling work in Krishna Godavari (KG) Basin block. Moreover, there were contradictions in the company’s written and oral submissions by the senior officials.The committee, which includes 14 MLAs both from the ruling BJP and opposition Congress, said the loss could have been avoided if the state government-controlled entity worked in a “responsible manner”.The panel, which monitors state-run public sector undertakings (PSUs), stated in the report tabled in the House on Wednesday that it reflected GSPC’s “irresponsible approach”. The panel scrutinises observations made by the Comptroller and Auditor General (CAG) on PSUs and makes recommendations to the state government. The CAG’s audit report tabled in the Assembly in 2017 observed that an “operational error” in drilling an offshore gas exploration well had cost Rs 500 crore to GSPC.The CAG was referring to the faulty drilling work carried out by the GSPC in one well, named KG-21, in the KG Basin (Krishna Godavari Basin).The CAG noted that it happened because the said well was drilled outside the template and the company realised it much later. As per the CAG report, the company had incurred an expenditure of Rs 478.98 crore on the offshore drilling work at the KG-21 offshore well.The GSPC had to spend an additional Rs 34.37 crore to make adjustments due to the faulty work.In its written response submitted to the Assembly panel, the company had said commercial production of gas from this well was not possible. However, company officials told the committee orally that the drilling was successful because GSPC found gas in it, the panel noted in its report submitted on Wednesday.“This contradiction in responses reflects the company’s dishonesty in presenting facts before the panel. According to officials, the well was drilled outside the template because of an error of judgement by a diver (who went in the water for technical work related to fitting template), which had cost the company Rs 500 crore,” the report said.In the meeting with committee members in August 2021, senior company officials informed that further development of the well will be done by ONGC as the GSPC had given operatorship of KG-21 and five other wells of DDW (Deen Dayal West) region to ONGC in April 2017.“It is clear that company officials had worked in an irresponsible manner. Because of their minimal monitoring and lack of expertise, the exploration site got changed. Instead of taking the responsibility, they held a diver responsible for this error, which had cost Rs 500 crore. This approach by officials is inappropriate,” the committee said.

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