UK's Hardy Oil & Gas plc today said it is in talks to acquire Reliance Industries' entire 90 per cent stake in a gas discovery block off the Gujarat coast.
RIL wants to exit Gujarat-Saurashtra offshore basin block (GS-01) as it feels that reserves discovered so far are not economically significant.
"We have a clear plan to acquire a further interest in, and operatorship of, our GS-01 asset," Hardy said in its Half Yearly operations report.
It said the completion of this process was pending the resolution of a long-standing liability associated with unfinished minimum work programme that is under consideration with the Government of India since 2009.
"A number of high level meetings were held with DGH and (Oil) Ministry representatives to facilitate the timely conclusion to Hardy's acquisition of Reliance's 90 per cent interest and operatorship.
"General commercial terms have been agreed and a draft farm-out agreement is under review by both parties," it said.
Hardy-Reliance have told the government the matter of possible liquidated damages associated with the two firms not completing their committed drilling programme, which is under consideration of the government since 2009, needs to be closed out prior to the conclusion of the acquisition process.
"A field development plan for the Dhirubhai 33 natural gas discovery was submitted to the government for review and approval in 2012.
"The development plan provides for several dry tree wells, an unmanned platform, multiphase pipeline to shore and onshore processing and export facilities," it said.
Hardy currently owns 10 per cent interest in the block where a gas discovery, named Dhirubhai-33, was made in 2007.
The well that discovered the reserves flowed 18.6 million standard cubic feet per day of gas and 415 barrels of condensate during tests.
The GS-01 licence is located in the Gujarat-Saurashtra offshore basin off the west coast, northwest of the prolific Bombay High oil field, with water depths varying between 80 meters and 150 meters. The retained discovery area covers 600 square kilometers.
"Both parties (Reliance and Hardy have made a constructive proposal to the Government of India to fulfil the unfinished minimum work programme liabilities, but we are awaiting a response from the Government of India," the UK firm added.
