The discovery of a huge gas field in Bay of Bengal has led to a war of words between Gujarat Chief Minister Narendra Modi and Centre's oil pointsman on the veracity of the reserves in the field.
At a news conference here, Modi said on Tuesday his claim of more than 20 trillion cubic feet of gas reserves in the field were based on technical and scientific inputs but V K Sibal, Director General of Hydrocarbons, of Union petroleum and natural gas ministry, said reserves cannot be estimated based on just one well.
"We have also got a third party verification (of the reserves)," Modi claimed though officials of Gujarat State Petroleum Corp, the Gujarat government firm which struck gas in the Krishna Godavari Basin block in Bay of Bengal, said the international agencies DeGolyer & McNaugthon of the United States and Gaffney Cline Associate of the United Kingdom would certify the reserves.
Modi mentioned the name of Petrotel of USA, which GSPC officials said was involved only in pre-drilling interpretation of seismic data.
Sibal, who visited GSPC's office last week to see logs of the gas find, said the announcement was "premature" as only one of the five zones in the well had flowed gas and companies announce reserve estimate only after proper testing of at least 3-4 gas-bearing wells.
After two dry wells, GSPC had found gas in the third well. Testing of the well has not been done yet.
Sibal also said the announcement was a violation of licence conditions which make it mandatory for companies to get oil and gas finds vetted by DGH to avoid speculation in the market.
Interestingly, GSPC is planning an initial public offering in next 6 to 12 months.
Sibal said he is writing to SEBI on the "premature" GSPC announcement and the possible impact it could have on the company's forthcoming IPO.
Modi said he had every right to announce a gas find as had been done by Reliance Industries (in the same KG basin in 2002), Cairn Energy (in Rajasthan) and ONGC (also in KG basin).
DGH officials however said the gas discovery by Reliance in KG basin, oil find by Cairn in Rajasthan and this month's gas find by ONGC were done only after testing of wells. "ONGC did not announce the reserve as they are yet to be certified."
The Gujarat Chief Minister claimed that the reserves intimated to him by scientists in the GSPC's gas field were larger than 20 tcf but he choose to be "conservative" in making the announcement.
Modi had on Sunday announced a 20 trillion cubic feet of gas reserves in the third well in the block KG-OSN-2001/3, some 6-km from Andhra coast.
The initial estimates of GSPC find are more than Reliance Industries' 14 tcf find in deepsea in the same Krishna Godavari basin and Oil and Natural Gas Corp's legendary Bassein field, off Mumbai coast, which has 10 tcf of proven reserves.
Sibal said of the five zones in the well, only one flowed at 10 million cubic feet per day while the other four remain to be tested, adding few more wells need to be drilled before in-place reserves in the gas find can be established.
Sibal said GSPC had struck 800 metre thick gas zone. The gas in GSPC block KG-OSN-2001/3 in shallow waters of Krishna Godavari basin has 86 per cent methane content as compared to Reliance Industries' gas find having 98 per cent methane content.