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RIL divests Yemen-9 Block To Medco, Indonesia

RIL had this August announced the sale of its stake in the oil producing block.

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Kalpana Pathak Mumbai
Last Updated : Jan 24 2013 | 2:10 AM IST

Reliance Industries  today said it has completed sale of its 25% stake in an oil block in Yemen to Indonesia's Medco Energi for around $90 million.

In a press statement RIL said its Dubai-based subsidiary Reliance Exploration and Production DMCC signed the completion documents for divestment of its 25% working interest in the Yemen's Block-9 to Medco Yemen Malik Ltd.

Medco Yemen Malik Ltd is a wholly-owned subsidiary of PT Medco Energi Internasional Tbk of Indonesia.

RIL had this August announced the sale of its stake in the oil producing block. The stake sale followed RIL exiting from two oil blocks in Kurdistan region of Iraq on July 19.
Post the sale, RIL will be left with interest in blocks 34 and 37 in eastern Yemen where it is investing $66 million with its patner Hood.

Post this exit from Kurdistan and Yemen, RIL will be left with a portfolio of 10 overseas oil and gas assets including two each in Peru, Yemen, Oman and Colombia and one each in East Timor and Australia.

RIL had this July sold its 80% interest in Rovi and Sarta onland blocks in northern Iraq to US oil behemoth Chevron Corp for a reported USD 200 million.The exits are part of the company's overseas asset restructuring wherein it is cutting exposure in exploration blocks to focus on producing properties.

RIL said the sale agreement with Medco would be effective from January 1. While the agreement is for a 25% interest, Medco would effectively have a 21.25% participating interest in the block because, under a regulation in Yemen, the contractor of a production-sharing agreement has to accommodate a working interest for the country, which is represented by the Yemen Oil and Gas Company, which will hold a 15% stake.

RIL had in 2001 won Yemen's Block 9 along with Hood Energy and Calvalley Petroleum Inc. RIL and Hood Energy held 25% stake each while Calvalley had the remaining 50%. Accordingly, the operator Calvalley Petroleum would have 42.5% interest and Hood Oil a 21.25% stake.

Block 9 covers 2,234 square kilometres in the Sayun- Masila basin in Yemen's Hadramaut province, about 350-km north-east of the Yemeni capital, Sana. It is estimated to hold proven plus probable reserves of 58.6 million barrels of oil. RIL would get another $5 million if the block produces 10,000 barrels of oil per day. The block currently produces between 6,000 barrels of oil per day (bpd) and 6,500 bpd.

 

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First Published: Dec 05 2012 | 2:27 PM IST

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