Reliance to buy Hardy Oil's stakes in 8 blocks

Reliance will take over 10% stake of Hardy Exploration and Production (India) Inc (HEPI) in the eight oil and gas exploration blocks the two firms had won together two years ago.

The takeover by Reliance would allow HEPI to exit from the eight blocks that were awarded under the third round of the new exploration licensing policy (NELP). Reliance currently holds 90% stake in them.

A Reliance Industries spokesperson said from Mumbai: "Reliance plans to acquire Hardy's participating interest in some of the NELP III Blocks." The eight blocks are: KG-OSN-2001/1; KG-OSN-2001/2; KK-DWN-2001/1; KK-DWN-2001/2; CY-DWN-2001/2; CY-PR-DWN-2001/3; PR-DWN-2001/4 and CY-PR-DWN-2001/1.

The production sharing contracts (PSCs) for NELP-III were assigned in February 2003, and Phase-I exploration for deepwater blocks expires in 2007 and for shallow water in 2006.

Reliance will have to undertake all obligations of HEPI to ensure that the contractual obligation of the contractor does not get diluted under the PSC. Reliance would have to furnish necessary guarantees in line with the PSCs, officials said.