New Delhi, June 19: Gail India Ltd is in the eye of a storm for repeatedly jumping the gun and making exaggerated claims on oil and gas finds made by its joint venture partners.
Earlier this year Gail had put Korean oil major Daewoo in trouble by announcing that a major gas discovery has been made in Myanmar by the joint-venture company in which it has a share along with ONGC-Videsh. This time it is the turn of Gujarat State Petroleum Corporation (GSPC) to be upset over Gail announcement.
While Gail has financial stake in both Myanmar and Gujarat blocks, it is not the operator in either of these fields. As it is a gas marketing company, Gail does not have the expertise to carry out oil exploration operations.
Both these finds are at a preliminary stage as only one exploratory well has been drilled. To announce on the basis of a single exploratory well that huge reserves exist in a prospective oilfield is not a prudent thing to do. It is only after several wells have been drilled in a particular block that an assessment can be made on whether the reserves will be commercially viable.
Daewoo had precisely objected to this in the case of Gail’s announcement on Myanmar field. The Korean company had highlighted the fact that they could get into trouble with their authorities by trying to pass off a preliminary gas strike as a major discovery merely to rig the stock price.
In the case of Gujarat State Petro too it is a case of who should get the credit. Industry circles feel that Gail is involved in a game of “one-upmanship”.