This is Jean Paul Roy – Canadian geologist who lives in Guatemala and speaks French, Spanish and English. Just 6 days before the KG Basin deal he created GeoGlobal incorporated in the Caribbean island of Barbados with a capital of just $64. Under the deal he was given 10% stake in KG Basin for his technical expertise in preparing the geological model for gas exploration (another 10% was given to Jubiliant Group. Jubilant’s Shyam Bhartia is the husband of Shobhana Bhartia, Chairperson and Editorial Director of the Hindustan Times Group. Their son Shamit Bhartia is also a Director at the HT Media group who is married to Nayantara Kothari grand-daughter of Dhirubhai Ambani). However in its disclosures before the US authorities, GeoGlobal told its shareholders that the company had no exploration experience before venturing into India and that KG Basin deal was its first. At the time it was claimed that the gas field designated as Block KG — OSN — 2001/3 was worth about $20 billion – meaning that Roy alone was holding $2 billion dollars without paying a single penny.
GeoGlobal’s share at the time of its creation was just $0.001. Than came the announcement of the “Biggest Ever Gas Discovery” of 20 Trillion CFT worth Rs 2.2 lakh crores and the share price sky rocketed to $14.92 per share (a 15,000-time appreciation in the share price). Within days of the deal Roy transferred 5% stake to a company in Mauritius, he still holds 5% stake in KG Basin. After sometime Roy, in a reverse takeover of a Vancouver based company named Suite101.com exchanged all outstanding capital stock of GeoGlobal for 34 million shares of Suite101.com. Roy was paid $2 million for the deal. It is here that the Gujarati taxpayers money is parked. On 2 February 2004, Suite101.com changed its name to GeoGlobal Resources Inc. In 2014 90% of GeoGlobal Resources (Israel) Ltd., a subsidiary of GeoGlobal Resources Inc. was acquired by Israeli businessman Shlomi Fogel the chairman and CEO of the privately-owned Israel Shipyards next to Haifa port who wants ships from all over the world to dock at the Haifa Shipyards where it will be loaded on trucks and taken across Israel’s border with Jordan. From there it will be distributed throughout the Arab world. In other words Israel is replacing Syria as the overland transit point for European goods shipped to the Arab World, thanks to the crisis in the Levant War Zone.
Roy used the #KGBasin deal to showcase his credentials and entered into nine more contracts with the Government of India. GeoGlobal Resources Inc. has entered into Production Sharing Contracts for exploration rights with the Government of India in the following areas:
- The Krishna Godavari Basin – offshore and onshore in the State of Andhra Pradesh in south eastern India
- The Cambay Basin – onshore in the State of Gujarat in western India
- The Deccan Syneclise Basin – onshore in the State of Maharashtra in west central India
- The Bikaner-Nagpur Basin – onshore in the State of Rajasthan in north western India
Sometime during 2006-07 the government realized that the deal was scandalous and could be a source of embarrassment. GSPC wrote to GeoGlobal and asked it to contribute towards the escalating exploration costs. But GeoGlobal refused to pay anything to GSPC citing the contract.
Years passed and nothing moved. So the GSPC hired another technical expert Petrotel USA to revise the geological model from scratch which was paid Rs 2.64 crore to do the same job for which Roy was given 10% stake in KG Basin. So why was Roy given 10% stake in KG Basin when the job could easily have been done in just Rs 2.64 crore?
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It was 2009 and it became clear that the cost of recovering gas was above the selling price. Now another deal is signed with Tuff Drilling to supply platform rigs. Needless to say that the company had no experience in building and operating modular platform rigs. The company did not deliver any rigs and incurred huge borrowings and interest payout for GSPC. The company was supposedly located at Lutyens Delhi and had 4 directors who were directors in a host of other shell companies as well, all located at the same address in Lutyens Delhi. Later Tuff Drilling defaulted on its loans and two of its directors were declared “willful defaulters” & frauds by Registrar of Companies, India, MCA.
GSPC which had zero loans on 31 March 2007 ended up having Rs. 19,270 crores loans from Public Sector Banks by Nov 2015. Just so that you understand, this is the taxpayers hard earned money that we are talking about here. After 11 years, dubious deals and 20,000 crores still there is no sign of any Gas. So where did this Rs 20,000 crores vanish? And now talks are on to bailout debt-ridden GSPC through ONGC. More importantly who is this Jean Paul Roy who holds a substantial stake in the KG Basin without contributing any meaningful expertise or paying a single penny? Who was he working for? What went wrong with the deal? There is more at stake here than just Gas. We will deal with these questions in the next part of this article.
Report by Shelley Kasli & Raja Sekhar for GreatGameIndia – India’s only quarterly magazine on Geopolitics and International Affairs.
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GeoGlobal’s Jean Paul Roy, who part-owns GSPC blocks, has a history of controversies
Report of the Comptroller and Auditor General of India on Public Sector Undertakings for the year ended 31 March 2015
Sweet Deals Are Made Of Gas
Tuff Drilling defaults on Rs 120-cr loan, sparks political storm
Israeli investors acquire country’s first drilling operator
Business is Business and Moses is Moses
GeoGlobal Resources Inc
Is ONGC under Pressure to Bail Out Debt-ridden Gujarat State Petroleum Corporation?GSPC: A Controversial Case Study