India's GSPC May Drop Plan for Strategic Partner

AHMEDABAD, Jan 15, 2007 (Dow Jones Commodities News via Comtex)

State-run exploration and production company Gujarat State Petroleum Corp. may abandon plans to take on a strategic partner to commercially exploit its natural gas find off India's eastern coast, a senior company official said over the weekend.

GSPC, which is owned by the provincial government of India's western Gujarat state, had earlier invited an expression of interest from global oil companies on its sale of up to a 30% stake in its 20 trillion cubic feet gas discovery in India's Krishna-Godavari basin.

However, the company hasn't made much headway in its talks with the four companies it had earlier shortlisted - BP PLC (BP), BG Group PLC (BG.LN), Chevron Corp. (CVX) and Italy's Eni SpA (E), the official told Dow Jones Newswires, without elaborating.

"We have been working on trial and error...we have learnt quite a lot, which gives us the confidence that maybe we should go it alone. After all, we wanted a partner for technical expertise. What's the use if we have to do everything ourselves?" said the official, referring to the company's drilling operations.

The company recently struck more gas in a new block in the same basin and is currently getting its latest find certified by the Directorate General of Hydrocarbons, India's upstream regulator.

"We have been drilling on our own, and the results have been very encouraging," said the official.

However, he declined to give the size of the new gas find, as the regulator prohibits exploration companies in India from making their discoveries public without its approval.

Copyright (c) 2007 Dow Jones & Company, Inc.

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