RIL in talks to buy El Paso's E&P unit worth $8.1 bn

Reliance Industries (RIL), which has acquired shale gas assets in the US, is among other companies in talks to buy the exploration and production (E&P) unit of US pipeline company El Paso Corp, Bloomberg today reported, citing unnamed people with knowledge about the matter.

In October last year, pipeline transporter Kinder Morgan Inc. agreed to buy El Paso Corp in a $21.1-billion cash and stock deal, creating the largest natural-gas pipeline network and the largest independent transporter of petroleum products in the US. (See: Kinder Morgan may acquire El Paso for $21.1 bn, create $94-bn business)

The Houston-based company had said that post closing, which is expected by the second quarter of 2012, it would sell the E&P business of El Paso to help reduce the acquisition debt.

Private equity firm Apollo Global Management is among the other companies in talks for the E&P unit of El Paso, which is estimated to be worth $8.1 billion by analysts at BNP Paribas, the report said.

Buying the E&P unit would give RIL, which has a market value of $44.5 billion, El Paso's 4 trillion cubic feet of oil and gas reserves in the Eagle Ford, Permian Basin and Haynesville shale plays.

El Paso's E&P unit also has operations in the Camamu, Espirito Santo, and Potiguar basins located offshore Brazil as well as two onshore blocks in Egypt's Western Desert and 48.8 per cent interest in Houston-based Four Star Oil & Gas Company.