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Modi govt gave away K-G basin stake for free?

Last updated on: December 1, 2012 17:57 IST

Modi govt gave away KG basin stake for free?



Did the Gujarat government make one man sitting in Barbados rich overnight at the Gujarat taxpayers' expense?

An investigation carried out by Tehelka, the Narendra Modi regime gave away a 10 per cent participating stake in an expansive gas field it had won in a bidding process to a company named GeoGlobal Resources that existed only on paper and was controlled by a Guatemala citizen named Jean Paul Roy. The company, incorporated in Barbados, had a capital of just $64.  

According to the report, the deal was inked in March 2003, when the BJP was in power both at the state and the Centre.

Detailing the shocking deal, Tehelka journalist Ashish Khetan said that the Barbados-based company didn't pay a single cent for its stake in the Krishna-Godavari Basin off the east coast of India. Even the company's 10 percent share to the cost of exploration was borne by the state PSU, the Gujarat State Petroleum Corporation.

Within days of signing the contract with the Gujarat PSU, GeoGlobal parked 50 per cent of its stake in the KG Basin to another shell company in Mauritius, Tehelka reported, adding that through questionable transactions GeoGlobal share value grew 15000 times from $0.001 in 2003 to $14.92 per share in 2009

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Modi govt gave away K-G basin stake for free?

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The CAG had tabled a report on state PSUs in the Gujarat assembly where it made a series of damning observations on the structure and the implementation of the joint venture between GSPC and GeoGlobal.

The CAG stated that the GeoGlobal's work was so deficient that GSPC had to hire another technical expert, for which it was paid Rs 2.64 crore -- a job for which GeoGlobal got a stake worth millions of dollars

In its defence, the Gujarat government told the CAG that, 'Jean Paul Roy of GGR, being a technical expert in the field, was admitted as a joint-venture partner for the block. He would not have agreed to solely carry out a technical evaluation of the block for bidding without being offered a Participating Interest in the block"

Tehelka further reported that Roy used his deal with GSPC to showcase his credentials as the head of a corporation and entered into nine more contracts with the Government of India, a majority of which were signed when the National Democratic Alliance regime was in power.

To sum up, GeoGlobal walked away with a substantial stake in the KG Basin offshore block without investing a dime and without making any meaningful technical contribution.

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