A dubious company registered in Barbados will enjoy a windfall of Rs 20,000 crore at the cost of Gujarat taxpayers thanks to an agreement inked under Modi’s watch
An Investigation By Ashish Khetan
CORRUPTION AND cronyism in the allocation of natural resources have been dominating the national discourse for more than two years. The giving away of precious 2G spectrum and coalmines by the Congress-led UPA regime has triggered anti-graft movements and invited unprecedented scrutiny from institutions such as the CAG, the Supreme Court and the media. But in the heat and dust of accusatory politics and competitive journalism, there is one shady deal involving a precious natural resource worth billions of dollars that has escaped public scrutiny. The deal involves the Narendra Modi government and a dubious company incorporated in the Caribbean island of Barbados.
In perhaps what would qualify as one of the most scandalous contracts ever signed, the Modi regime gave away a 10 percent 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. The company, incorporated in Barbados, had a capital of just $64.
The deal was inked in March 2003, when the BJP was in power both at the state and the Centre. Shockingly, the Barbados-based company didn’t pay a single cent for its stake. Even the company’s 10 percent share to the cost of exploration was borne by a state PSU, the Gujarat State Petroleum Corporation (GSPC). Within days of signing the contract with the Gujarat PSU, GeoGlobal parked 50 percent of its stake in the KG Basin to another shell company in Mauritius.
The Gujarat government has justified this sweetened deal on the sole ground that GeoGlobal was a technical expert and had helped the government in preparing the geological model for gas exploration. But in its latest report, the CAG has pointed out that GeoGlobal’s technical assistance has been so deficient that GSPC had to hire another technical expert to revise the geological model from scratch. The revised technical advisory work cost the government just Rs 2.64 crore. While for the same work, it had given GeoGlobal a permanent stake of 10 percent worth millions of dollars.
On 27 March 2002, the GSPC formed a consortium with GeoGlobal Resources India Inc and an Indian company named Jubilant Enpro Pvt Ltd. GeoGlobal was incorporated only six days before the formation of the consortium and was effectively controlled by a single person named Jean Paul Roy, a resident of Guatemala. The consortium was formed to bid for a gas block measuring approximately 4,57,000 acres in the Krishna-Godavari Basin off the east coast of India under the National Exploration Licensing Policy III framed by the BJP-led NDA government.
At the time of bidding, the Gujarat government claimed that the gas field, designated as Block KG — OSN — 2001/3, had over 45 trillion cubic feet of recoverable gas. As per the Modi government’s own estimates, the gas field was worth about $20 billion.
The absurdity of the deal could be gauged from the fact that the Modi government gave away 10 percent stake, which in its own eyes was worth millions of dollars to GeoGlobal on the ground that the company had international experience and a proven track record in the oil and gas exploration field. On the other hand, in its disclosures before the US authorities, GeoGlobal told its shareholders that the company had no exploration experience before venturing into India and the GSPC-led joint venture was its first foray in the oil and gas exploration business.
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