ONGC to buy stake in GSPC’s KG basin gas block

Oil and Natural Gas Corporation (ONGC) has received an approval for signing of a preliminary agreement for buying a stake in Gujarat government firm GSPC’s KG basin gas block. The board of director of the company at its meeting on September 8, 2016 approved signing of a MoU for taking a stake in Gujarat Petroleum Corporation’s (GSPC) gas block.

The MoU also incorporates a dispute resolution wherein any differences over issues like valuation or natural gas reserves would be referred to a three-member committee of outside experts. ONGC initially was not keen to buy stake in the block as it felt the block had reserves far less than what GSPC was claiming and the asking price for the stake was not commensurate with the returns.

ONGC is India's largest government-run corporation and produces about 70% of India's crude oil and natural gas. The corporation is the biggest public sector commercial organization in India.