Reliance Industries to divest shareholding in overseas exploration blocks

Reliance Industries has initiated talks with global energy majors to offload its shareholding in at least six overseas exploration blocks to lower its risk according to a source close to the development.

The company owns 70 per cent to 100 per cent stakes in blocks in several countries including Columbia, Oman, Australia and Yemen through its wholly-owned subsidiary Reliance Exploration and Production DMCC.

Apart from the one in Yemen, the rest are all exploratory blocks and RIL is currently engaged in carrying out seismic surveys of these. The average production from the Yemeni block is pegged at 4,500 barrels of oil per day (bopd).

According to the source, the company aims at divesting its majority stake in offshore blocks in Australia, Oman and Columbia in addition to its minority stake in two on-shore blocks in Yemen. The source added the RIL will likely retain is operatorship of the blocks after the divestment is completed.

According to a RIL spokesperson who confirmed the proposed move, the move follows the general practice in the global exploration and production business to optimise the portfolio on the basis of risk and reward.

The need for such farming out of blocks is determined from various factors including the strengths added by a potential partner, restructuring needs of the portfolio etc and could be undertaken following completion of some basic studies.

According to RIL's website, the company's international oil exploration business spans 11 blocks with acereage of 80,000 square kilometers, three in Yemen, two each in Oman, Kurdistan and Colombia and one each in East Timor and Australia. RIL is in production sharing contracts (PSC) for two oil blocks in Kurdistan and Yemen and one each in Oman and Australia.