Pradhan says govt won't come in way of ONGC-GSPC deal

Welcomes Saudi Aramco and Total SA to invest in downstream oil and gas

The government will not come in the way of a possible acquisition by state-run Oil and Natural Gas Corporation (ONGC) of oil and gas assets of Gujarat State Petroleum Corporation (GSPC) in the Krishna Godavari basin off the Andhra coast, oil minister Dharmendra Pradhan has said.

The likely deal between the two firms is in the centre of allegations made by opposition Congress party which alleges the Modi government is forcing ONGC to take over GSPC's troubled assets. "This is a matter between two professional firms. If they are able to form a commercial understanding with profit motive in mind, best wishes to them," Pradhan said.

He was responding to a question on fresh allegations made by Senior Congress leader Jairam Ramesh that Pradhan wants to "palm off" GSPC's KG Basin block to ONGC because the former is in deep financial distress and is unable to even pay back loans.

The opposition party had Thursday said a Comptroller and Auditor General (CAG) report has accused GSPC of squandering Rs 20,000 crore raised as loans from 15 public sector banks and Pradhan is pressuring officials to merge GSPC with ONGC to cover up the wrongdoings.

The oil minister, who was briefing the media on achievements made by his ministry in two years, called the charges leveled by Ramesh as baseless and blamed the Congress-led previous United Progressive Alliance (UPA) regime for the GSPC fiasco. "Had the UPA government, in ten years of its rule, properly implemented the provisions of the New Exploration Licensing Policy (NELP), GSPC would also have produced (oil and gas)," Pradhan said.

The two firms are understood to be in talks for a majority stake sale in GSPC's Deen Dayal West (DDW) block. For GSPC, the deal would mean more financial muscle to partly clear its Rs 19,576 crore debt but also create a war chest to fund its future expansion plans worth $3 billion in exploration and development.

The minister also said the government would welcome foreign firms including Saudi Aramco and Tatal SA of France to participate in the Indian downstream oil and gas industry as per domestic conditions, in case they evince interest. Pradhan also said the government will appoint 10,000 new LPG distributors this year, on the top of existing 16,000 under a new procedure in order to expand LPG network.