GSPC raises Rs 3,000 cr term loan to fund DDW in KG basin

State-run oil and gas explorer Gujarat State Petroleum Corporation (GSPC) said it has raised Rs 3,000 crore term loan through a consortium of 15 banks to finance its Deen Dayal West block in KG basin.

The company also said its Initial Public Offering is likely sometime later next year.

"A consortium of 15 banks, led by Bank of Baroda, has arranged for the loan. The funds shall be used to finance Deen Dayal West block in KG Basin. The IPO will now be sometime away," GSPC top officials told PTI.

A top SBI group executive in know of the development, further said, "GSPC has tied up Rs 3,000 crore term loan through a consortium of 15 banks to finance its Deen Dayal West field in Krishna Godavari Basin on coast of Andhra Pradesh."

The state-run energy major was scheduled to hit the capital markets with an IPO in June this year to raise over Rs 3,000 crore. However, the IPO was delayed due to market conditions.

The Director General of Hydrocarbons (DGH) has certified two TCF (trillion cubic feet) gas reserves in GSPC's Deendayal block in the KG basin.

DDW is being developed by consortium partners of GSPC like Jubiliant and Geo Global Resources Inc. The field, in the KG basin, off the east coast, was discovered in June 2005 and awarded to GSPC under the third round of the New Exploration Licensing Policy.  

As per the DRHP, which was submitted to SEBI earlier by the GSPC, the estimated cost of developing Din Dayal West (DDW) field is an estimated Rs 8,464 crore. The development cost includes the facility and drilling cost for 15 wells up to fiscal 2015.

GSPC has proposed to fund part of its share of capital expenditure towards development cost of DDW.

"While, the estimated cost of developing DDW field upto fiscal 2013 is over Rs 5,971 crore, GSPC's share towards capital expenditure in the same period will be over Rs 4,777 crore, of which Rs 3,000 crore has been arranged," a GSPC official said.

GSPC has proposed to commence commercial gas production from the DDW field by June 2012.