Bharat Petroleum Corporation today said its exploration arm, Bharat PetroResources, has entered into an agreement with Australia's Norwest Energy to pick up a stake in two shale gas blocks in the Perth Basin.
"BPCL, through its 100 per cent subsidiary Bharat PetroResources Ltd (BPRL), has executed a letter of intent with Norwest Energy of Australia, for farming into two exploration acreages in the Perth basin EP413 and TP/15, which hold shale gas potential," the company said in a filing to the stock exchanges.
Norwest Energy currently holds 100 per cent interest in TP/15 and over 55 per cent interest in EP413 and is the operator of these blocks. Australia Worldwide Exploration partners Norwest Energy in the EP413 block, where it holds a stake of around 44 per cent.
"BPRL will acquire half of Norwest's interest in each of these blocks," the statement said, adding, "BPRL's commitment for these projects is up to 15 million Australian dollars (about $13.5 million) for exploration and drilling funding, including a carry of part of Norwest's share of the investment."
In its filing, BPCL noted that BPRL already has interests in two exploration projects in the Australian region and the current acquisition would give it the chance to enter the shale gas business.
In a separate filing to the Australian Stock Exchange yesterday, Norwest said, "BPRL has received the necessary approval to proceed with the transaction and is currently conducting its formal due diligence process, to be completed within 20 days of this announcement."
The transaction is also subject to Western Australian Department of Mines and Petroleum approval, it added.
The EP413 block is considered to have good potential for shale gas and it is proposed to drill at Arrowsmith, where in the 1960s, gas flowed at 4 million metric cubic feet a day (MMCFD).
The Red Hill South prospect in TP/15 block has potential recoverable oil of 9 million barrels, the Norwest filing said.
"Norwest plans to drill both the EP413 and TP/15 (blocks) by the end of 2010 or early 2011 and is in the process of sourcing a suitable drilling rig capable of drilling both drill targets," it added.
BPCL shares were being quoted at Rs 697.85 on the BSE today, up 3.24 per cent over the previous close.
