Mumbai, April 8: Gujarat Petroleum Corp (GSPC) aims to launch an initial public offer (IPO) later this year to raise up to $1.5 billion, two sources directly involved in the deal said on Tuesday.

GSPC, which has struck oil and gas in the Krishna Godavari (KG) basin off India's east coast, will use the IPO proceeds to partly fund its exploration and production activities, the two sources, who did not wish to be identified, told media.

"GSPC is expecting a report on its KG block reserves from Gaffney Cline after a month, after which the IPO filing process will start," one source said. Gaffney, Cline & Associates is a US-based international certification agency.

GSPC, which owns 38 percent in gas transporter Gujarat State Petronet Ltd, is the operator of the block in the KG Basin where it has made a significant gas discovery.

In 2005, GSPC said the block may have reserves of 20 trillion cubic feet (tcf), but in 2007 it told the government that proven reserves were 1.38 tcf, on the basis of a find in one well, and that it was expected to hold much more.

GSPC holds 80 per cent of the block, with Canada's Geoglobal Resources Inc and India's Jubilant Enpro as partners. The IPO will be launched in the December quarter, the sources said, adding GSPC has appointed, Merrill Lynch and India's JM Financial, Kotak Mahindra Capital Co and SBI as managers to the issue.

A GSPC spokesman declined comment. GSPC, owned by the government of the western state of Gujarat, earlier wanted to raise $1 billion through an IPO in 2007, but the plan was deferred as it considered selling a stake in the KG block to a strategic partner.

"The company is not looking for any partner now, the stake sale is not happenning and the money will be raised through the IPO," the second source said. He said GSPC planned to spend 75 billion rupees ($1.9 billion) by 2012 as capital expenditure, most of which would be invested in exploration and production.

Indian companies raised a record $8.3 billion through IPOs in 2007, but turmoil in global financial markets have doused appetite for new offerings.

The main stock index has fallen more than a fifth this year after rising 45 per cent on average in each of the previous three years.

IPOs for $13.7 billion have been withdrawn in 2008, Thomson Financial data shows, including large Indian offers by property developers Emaar MGF Land, DLF Offices Trust and Unitech Office Trust.