Reliance takes 90 per cent stake in Peruvian oil block

30 April 2008

Mumbai: Reliance Industries, India's largest private sector enterprise with businesses in the energy and materials value chain, today signed an agreement to acquire a 90 per cent stake in an oil block in Peru.

Reliance bought the stake in block 141 in the high plateau of Peru from Pan Andean Resources PLC, company CEO and president (oil & gas) PMS Prasad said.

Pan Andean will dilute its interest in Block 141 to 10 per cent, in return for which Reliance Industries will incur all exploration costs through commercial discovery.

Following a commercial discovery of an agreed size, Pan Andean will reimburse Reliance for its share of the exploration costs.

In addition, based on a formula established in the farm-out agreement, Pan Andean has the right, though not the obligation, to increase its stake to a maximum of 30 per cent. In such a situation Pan Andean will reimburse Reliance Industries for that proportion of its exploration expense on Block 141 which Pan Andean will then own, it said.

Block 141 is situated in 1.2 million acres (0.5 million hectares) of Andean mountain plateau.