GSPC-Geo Global deal: Guj HC seeks reply from govt on PIL

The Gujarat High Court today issued notices to the state government, Centre and Gujarat State Petroleum Corporation on a PIL seeking CBI probe into the PSU's joint venture with Canada-based Geo Global Resources (GGR) for oil and gas exploration in Krishna-Godavari basin.
The petitioner, Nimishkumar Shah, has alleged the deal caused a loss of Rs 10,000 crore to the government.
The division bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala issued notices to the state government, GSPC and Centre, seeking replies within two weeks.
The next hearing would take place in June.
GSPC holds 80 per cent stake in Deendayal Block, while Jubilant Enpro and GeoGlobal Resources, its consortium partners, hold 10 per cent stake each.

The consortium partners committed USD 59.23 million for the first exploration phase and USD 32.12 million and USD 18.35 million for the subsequent phases amounting to a total of USD 109.7 million.

Differences cropped up between GSPC and GeoGlobal in September 2005 when the state company asked the Canadian partner to contribute towards exploration costs on account of 'significant cost overruns'.
"Bidding for KG block was made as per the geological model prepared by GGR...The model was deficient, which led to escalation in the cost of exploration phase from Rs 531.94 crore to 6,265.68 crore," the petition claims.
"Unreasonable time was taken in completing Environmental Impact Study and wells were drilled beyond exploration period ...Improper management of exploration and development activities led to incurring of avoidable expenditure/losses."

Pegging the loss caused at Rs 10,000 crore, the PIL seeks probe by CBI. It also cites a Comptroller and Auditor General's report on the issue.