ONGC BOUGHT STAKE FOR HALF THE ASKING PRICE

New Delhi, Oct. 21: ONGC bought Gujarat State Petroleum Corp’s ( GSPC) stake in a KG basin gas block for $ 1.2 billion ( about ` 8,000 crore) when the replacement value of brand new assets built by the company is at least $ 1.5 billion and the asking price was ` 20,000 crore, its ex- chairman D. K. Sarraf said.

With Opposition attacking the government over what it said was “pressure” exerted on ONGC to first bail out the debt- laden GSPC and then using the company to meet the disinvestment target by selling majority stake in HPCL, Mr Sarraf, who headed the company when the two deals were struck, defended the acquisitions as “strategic and of immense value proposition”.

ONGC, he said, has been in the business of acquisition of oil and gas assets for decades, with its overseas investment arm ONGC Videsh Ltd ( OVL) amassing 41 projects in 20 countries.

“And so when quality assets are available next door, it is better than going abroad,” he said referring to GSPC putting on sale its 80 per cent stake in Deen Dayal West ( DDW) gas field in Block KG- OSN- 2001/ 3 in the Bay of Bengal and the government offering 51.11 per cent stake in HPCL. delivery settled at $ 69.12 a barrel on the New York Mercantile Exchange, while Brent for December settlement was at $ 79.78 a barrel on the London- based ICE Futures Europe exchange. Brent had earlier this month hit a four- year high of $ 86.74 a barrel.