RIL to sell its Cambay Basin oil & gas block to Sun Petrochemicals
30 Jul 2018
Reliance Industries Ltd (RIL) is reported to have agreed to sell its entire 70-per cent stake in the Cambay Basin exploration block, off the Gujarat coast, to Sun Petrochemicals Ltd, an oil and gas venture promoted by Sun Petrochemicals chairman Dilip Shanghvi, for an undisclosed price.
Reliance, the operator of the block, has a 70-per cent participating interest in the oil and gas block CB-ONN-2003/1 (also called CB-10) while BP India holds the balance 30 per cent as per the joint venture agreement between the two companies.
“RIL signed a sale and purchase agreement (SPA) with Sun Petro to farm out its 70% interest in the block. The application for assignment has been submitted to the Government of India for approval,” the Mint newspaper quoted RIL as saying during an analysts presentation on Friday.
The report said BP is also expected to sell its stake as the two had jointly put up the block for sale.
RIL had won the CB-ONN-2003/1 block consisting of two parts and covering an area of 635 sq km, in an auction under the New Exploration and Licensing Policy (NELP) in 2005.
With the sale of CB-10, RIL will hold only four blocks — KG-D6 block in the Krishna Godavari basin; Mahanadi basin blocks NEC-25, Saurashtra basin block GS-01 and the Panna-Mukta-Tapti oil and gas fields off the West coast.
RIL will shut down the MA oil and gas field in KG-D6 from September.
In 2011, RIL had announced a “transformational” deal with UK-based BP Plc, which picked up 30 per cent stake in its 21 oil and gas blocks. However, since 2012, both companies have been pruning their portfolio, relinquishing unviable blocks.
RIL had earlier sold all its 16 overseas conventional oil and gas exploration blocks that it acquired in the past, except two shale gas assets in the US. In October 2017, it agreed to sell the first of its shale gas ventures — upstream Marcellus shale gas assets in North-Eastern and central Pennsylvania in the US — for $126 million.
The company is also looking at merging Reliance Holdings USA with itself. It is also seeking Reserve Bank of India approval, in terms of Foreign Exchange Management (Cross Border Merger) Regulations, 2018, for amalgamation of Reliance Holdings USA Inc, with Reliance Energy Generation and Distribution Ltd (REGDL), a wholly owned subsidiary of the company and subsequent amalgamation of REGDL.
RIL officials said the merger would help the company look at pooling its international gas resources for India, similar to its ethane imports.