GANDHINAGAR : After years the state government owned Gujarat State Petroleum Corporation (GSPC) has finally admitted a loss of Rs 14,923 crore in official audit documents , after taking into account the Rs 8,000 crore received from ONGC against sale of 90% share of the GSPC’s KG basin operations. As it stands, the GSPC will now have to pay back banks and financiers more than Rs 15,000 crore.

GSPC said in the report, “The company has recorded loss on account of impairment of Rs 14,923 crore which is charged to profit & loss.”

When contacted, T Natarajan, joint managing director, GSPC, confirmed the development, but said, “It’s nothing but an accounting procedure. After the ONGC deal, and as a part of the company’s initiative for debt restructuring and legal formalities, we have shown the final loss in our profit and loss account.”

In its audit report, GSPC noted, “The KG Block has substantial gas and condensate reserves, but due to technical challenges such as high pressure, high temperature and tight reservoirs in offshore environment, the requisite future capital investment to achieve desired levels of production had pushed the company towards a highly leveraged position.”

The report read further, “The company was unable to infuse further capital for future development which triggered the strategic transfer of KG Asset to ONGC.”

The buzz is that GSPC is now looking to restructure its debt, but the prospect seems dim unless the state government comes forward to bail it out with taxpayers’ money. While interest will keep escalating, the GSPC doesn’t have any major source of income to pay the amount to banks and stop the debt from getting bigger. The corporation is looking at internal restructuring and ‘merger’ like options with other state-run companies like GSPL and GGL.

