Lots at stake for Gujarat State Petroleum Corporation insiders in gas deal

AHMEDABAD: The Narendra Modi government may have to take some more tough questions on the recent controversy around KG block stake offer to a one-man firm.
Investigations revealed that two senior technical advisors with Gujarat State Petroleum Corporation (GSPC) had recommended a tie-up with GeoGlobal Resources India Inc (GGRI), a $64 firm promoted by Guatemala resident Jean Paul Roy.Both of them later joined Roy’s firm for 10 times their existing salary.
Six out of eight GeoGlobal staffers in India had been hired from GSPC, indicating that the tie-up with GSPC was an insiders’ job. Roy also became a favourite with chief minister Narendra Modi, who invited him to Ahmedabad in 2007 to give presentations at the Vibrant Gujarat investors’ meet.
Investigations also revealed that Roy ran his Mauritius subsidiary from an office he shared with 46 other foreign venture capital investors (FVCI). Significantly, within a month of GeoGlobal being given a 10% participating stake in KG Basin gas block by GSPC in early 2003, the company transferred 50% of its stake to Roy’s fully owned company Roy Group (Mauritius). As per Gujarat government estimate, the gas field is worth about $20 billion.
As per Mauritius government records, Roy Group operates from 28, Cybercity Ebene. The address is same as that of 46 active FVCIs in India out of the total 154 registered with the Securities and Exchange Board of India (Sebi). Many of these investors have pumped in billions of dollars into the Indian stock market.
The last CAG audit report states that “GSPC on ground that GeoGlobal Resources is technical expert admitted it in the JV without taking any financial contribution made for exploration of the KG bock”.
GSPC has spent nearly Rs 6,000 crore in drilling the KG block which, during the time of bidding, was estimated at Rs 500 crore. The CAG also reported that GSPC had to drill till around 77,393 metres, against an estimate of 44,348 metres, because of a deficient geological model prepared by GGRI.