The GSPC jumla

Business Standard - - OPINION - JY­OTI MUKUL

With the spud­ding of a well in a block in the Kr­ishna-Go­davari (KG) basin re­cently, state-owned Oil and Nat­u­ral Gas Cor­po­ra­tion ( ONGC), the coun­try’s big­gest oil and gas pro­ducer, joined Reliance In­dus­tries Ltd and Gu­jarat State Petroleum Cor­po­ra­tion (GSPC) to be­come the third ma­jor player at­tempt­ing to pro­duce from the tricky deep wa­ters of the Bay of Ben­gal.

The KG basin is an ex­ten­sive deltaic plain formed by two large east coast rivers, Kr­ishna and Go­davari, in Andhra Pradesh and the ad­join­ing sea in which these rivers dis­charge their wa­ters. Ac­cord­ing to the Direc­torate Gen­eral of Hy­dro­car­bons, the basin is a proven “petro­lif­er­ous” con­ti­nen­tal mar­gin with its on-land part cov­er­ing 15,000 square kilo­me­tre (km) and the offshore part cov­er­ing 25,000 square km.

The vast ge­o­log­i­cal po­ten­tial of the KG basin has, how­ever, un­made many am­bi­tious cor­po­rate claims, from both pri­vate com­pa­nies and pub­lic sec­tor units (PSU). Su­bir Ghosh’s book Grand Il­lu­sion: The GSPC Dis­as­ter and the Gu­jarat Model, ex­am­ines the Gu­jarat-based PSU’s con­tro­ver­sial KG basin jour­ney.

GSPC, he points out, was essen­tially a gas trad­ing com­pany that ven­tured into ex­plo­ration in the KG basin, once an ex­plo­ration and pro­duc­tion hotspot. To him, the Gu­jarat PSU took up what was one of Naren­dra Modi’s jum­las (fake prom­ise) as Gu­jarat chief min­is­ter, and then cre­ated a big hole in its bal­ance sheet af­ter its failed at­tempts at an ini­tial pub­lic of­fer.

The book be­gins by chart­ing the jour­ney of Mr Modi’s Gu­jarat Gau­rav Ya­tra as chief min­is­ter. The pro­logue talks about how dur­ing the ter­ror­ist at­tack on the Ak­shard­ham tem­ple in Gand­hi­na­gar in Septem­ber 2002, the state gov­ern­ment was en­gaged in in­creas­ing the net worth of GSPC in 48 hours so that it could meet the bid­ding cri­te­ria for the KG block in the auc­tion under the New Ex­plo­ration and Li­cens­ing Pol­icy (NELP).

Mr Ghosh’s at­tempt to list out GSPC’s mis­de­meanours in the KG basin, de­spite a dis­cov­ery in the KG-OSN-2001/3 block, heav­ily re­lies on the re­ports of the Comp­trol­ler and Au­di­tor Gen­eral (CAG) that were placed in the state Assem­bly. There isn’t much re­search from pri­mary or sec­ondary sources that such a work and topic would have war­ranted. At var­i­ous places, he lifts di­rectly from the CAG re­ports to bol­ster his the­ory that GSPC wil­fully messed up its fi­nances. For in­stance, the chap­ter ti­tled “Cry of the Wolf” quotes: “Against the es­ti­mated drilling cost of $102.23 mil­lion and the to­tal depth com­mit­ted of 45.348 me­tre in the min­i­mum work pro­gramme, the ac­tual drilling cost in­curred was $1,302.88 mil­lion and the to­tal depth drilled was of 77,395.07 me­tre.”

Besides GSPC’s debt and huge ex­pen­di­ture in the KG ex­plo­ration ven­ture, Mr Ghosh also goes into the al­leged favours granted to GeoGlobal Re­sources by way of 10 per cent par­tic­i­pat­ing in­ter­est in the block in re­turn for tech­ni­cal ad­vice from one Jean Paul Roy, a Cana­dian ge­ol­o­gist. Later, Mr Roy fell out with GSPC af­ter the com­pany de­vi­ated from its planned de­vel­op­ment pro­gramme. Mr Ghosh, how­ever, casts doubts on the news re­port about the fall­ing out by ques­tion­ing the Eco­nomic Times re­porter’s sub­se­quent ca­reer moves and con­trast­ing it with that of Ashish Khetan who re­ported on the GeoGlobal con­tro­versy in Te­helka mag­a­zine and later joined the Aam Aadmi Party, which raked up the is­sue at the po­lit­i­cal level.

As with Mr Ghosh’s ear­lier coau­thored work Gas Wars, Grand Il­lu­sion is all over the place with the writer los­ing fo­cus in some chap­ters that crit­i­cise the Hy­dro­car­bon Ex­plo­ration and Li­cens­ing Pol­icy that has re­placed NELP and sub­se­quently even the ap­point­ment of ONGC’s cur­rent chair­man. Tak­ing a dig at the Na­tional Demo­cratic Alliance gov­ern­ment’s Ease of Do­ing Busi­ness theme, a chap­ter “The Ease of Lur­ing Busi­ness” be­gins with the Tata Nano project be­ing re­lo­cated from West Ben­gal to Gu­jarat and Mr Modi’s run-ins with the Amer­i­can gov­ern­ment on grant­ing him a visa and the fa­mous Con­fed­er­a­tion of In­dian In­dus­try sum­mit that crit­i­cised the 2002 Gu­jarat ri­ots. The only com­mon string among these is­sues is Mr Modi and his Vi­brant Gu­jarat theme.

Though Mr Ghosh has cho­sen a con­tem­po­rary topic that had seen lim­ited de­bate in the print me­dia and had been com­pletely blanked out by the elec­tronic me­dia, his work could have been en­riched had he also gone into greater de­tail about the KG basin, its tech­ni­cal as­pects, and the man­ner in which ONGC was forced to buy the GSPC block in 2017. In­ter­views with oil sec­tor pro­fes­sion­als, in­vestor ac­tivists who crit­i­cised the GSPCONGC deal, and even jour­nal­ists who have long tracked GSPC were some of the ba­sic tech­niques that could have en­riched his writ­ing. His sole reliance on CAG re­ports and dis­parag­ing news items have not been able to make up for the lack of de­tail­ing, es­pe­cially on the fi­nan­cial ir­reg­u­lar­i­ties in GSPC’s func­tion­ing. To his credit, how­ever, Mr Ghosh has put to­gether all you need to know about GSPC in the con­text of Mr Modi’s rise from chief min­is­ter to prime min­is­ter.

GRAND IL­LU­SION: THE GSPC DIS­AS­TER AND THE GU­JARAT MODEL

Su­bir Ghosh Au­thors UP­FRONT 233 pages; ~395

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