ONGC to buy out GSPC’s KG block stake

ONGC to buy out GSPC's KG block stake

Question: Oil and Natural Gas Corporation has signed an agreement to buy KG block stake of Gujarat State-Petroleum-Corporation for a sum of –
(a) $1.0 billion
(b) $1.2 billion
(c) $1.5 billion
(d) $1.8 billion
Answer: (b)
Related facts:

  • On March19, 2017, Oil and Natural Gas Corporation (ONGC) signed definitive agreement to buy out stake in KG-basin natural gas block of debt ridden GSPC.
  • ONGC will buy out its entire 80% stake for $1.2 billion.
  • Board of ONGC had approved the deal on 23 February.
  • After regulatory approvals like government nod for transfer of PI (participating interest) and change of operatorship the deal will come to an end.
  • Previously GSPC had offered ONGC its 50 per cent stake in the block together with operatorship, but the state-owned firm was not interested.
  • Gujarat State-Petroleum-Corporation was incorporated in 1979.
  • ONGC will pay $995.26 million for three discoveries in the KG-OSN-2001/3 block that are under trial production.
  • A $200 million will also be paid for six other discoveries for which GSPC has been finalizing an investment plan to bring them to production.

Reference:
http://economictimes.indiatimes.com/industry/energy/oil-gas/ongc-signs-pact-to-buy-out-gspcs-kg-block-stake-for-1-2-billion/articleshow/57714475.cms
http://www.business-standard.com/article/companies/ongc-signs-pact-to-buy-out-gspc-s-kg-block-stake-for-1-2-bn-117031900086_1.html
http://www.gspcgroup.com/vision