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Carrizo has also forged an alliance with a private Chinese company for exploration in that country. “We see the opportunity to sit down with each of our India partner and try to find potential where we can cooperate in India. The same would be true for investment in third countries,” Gerald A Morton, general counsel and vice-president, business development, told Business Standard.
Morton said the company was looking for capital and its Indian partners are among the strongest — financially stable and with good credit ratings. “As an American company, we are relatively small. We have looked at third countries and if we find one where economic return is good, we will always look first towards our joint venture partners.”
In October 2012, Oil India and Indian Oil Corporation together snapped up a 30 per cent stake in Carrizo’s Niobrara shale gas asset in Colorado for $85.2 million. It was the third partnership with Indian companies for Carrizo. RIL, the first Indian company to enter the shale business in 2010, bought a 60 per cent stake in a Marcellus shale property in the US, while GAIL has 20 per cent in Eagle Ford in that country.
In April 2010, the Houston-based company announced start of oil a focused horizontal development programme in the Eagle Ford shale in south Texas, where it has 58,000 net acres (its share in the total property) and in the Niobrara Formation in northeastern Colorado, where it holds another 47,250 net acres. The company also has 21,700 net acres in Utica Shale in Eastern Ohio, where it drilled the first well this year.
In India, the company has tied up with ONGC and Oil. If not equity partnership, Morton said, the company would prefer “at least equity equipment partnership. There is little value to being paid just a fee for your service”. India has opened shale exploration for only state-owned companies — ONGC and Oil — in nominated blocks.
On working with private and state-owned oil companies, Morton said though all were technically competent and good partners, the difference lay in their goals. “The primary goal of the private company (RIL) is to aspire to establish a shale gas division in the US. They are looking to be a US oil & gas company. (Owner Mukesh) Ambani’s vision is to be like Exxon and Chevron. State-owned companies, on the other hand, want to understand how to explore oil shale & gas and come with that knowledge to India.”
