It was a well-contested block, when it was put up for bidding "way back" under NELP-III (third round of National Exploration Licensing Policy). The last date of submission of bids was 28th August 2002, while Reliance announced their find only in November 2002. Going by industry rumour, that find was originally ONGC's. Even discounting that rumour, it is very likely that having already explored the area both Reliance and ONGC knew the area very well. Thus the winning bid was a surprise. For the record, ONGC and Reliance are likely to win all K-G Basin blocks on offer under NELP-V.
Drilling operations started on July 31, 2004. After abandoning the first two wells at depths between 2600 and 2900 m, the third well was spudded on January 17, 2005. The reserve was confirmed at a depth of 5,061 m.
Joint ventures are usually the norm in the upstream oil sector. So GSPC is actually a part of a consortium and owns 80% of it. The rest is held by GeoGlobal Resources of Canada and Jubilant Enpro of Noida, India. The smaller partners generally bring in expertise and are likely to sell out by the time production is commercialized.
News reports claim that GSPC wants to get the gas onshore by 2007. Reliance plans to start production in August 2006, though they started out over 2 years ago. But then drilling three wells of those depths within 300 days is also a record of sorts. To commercialise production, GSPC needs Rs 1,500 crores and an IPO is planned (expect a stampede soon!). Currently the Gujarat government owns 99% of GSPC, while a British Gas subsidiary Gujarat Gas owns the remaining 1%. The government is likely to divest 20% of the company within 6 months. GSPC had been earmarked for divestment even before this find.
GSPC intends to drill four more wells, and tenders have already been floated for these. Drilling is scheduled to start after the monsoons.
This find can have likely impact on a range of gas deals for India from the proposed pipelines to LNG import to domestic pricing. Need to do some research (or find a news article with figures I can simply validate!), but I'll be back on this, hopefully, soon.
* While most media reports seem to agree that this is India's biggest find ever, this report from ET states that the Bombay High find (Vasai offshore), way back in 1976 was still bigger at 22-24 tcf. But even ET agrees that it is probably the biggest find in the world in the new millenium.