RIL-China National Petroleum team wins bid for Peruvian gas block

18 September 2008

Mumbai: A consortium of Reliance Industries, China National Petroleum Company (CNPC) and Argentina's Pluspetrol has won the exploration rights for a gas block in Peru, helping the Mukesh Ambani-led company expand its presence in Latin America.

Another Indian company, Jindal Steel and Power Ltd, has teamed with up Enigma Oil and Gas Exploration (Pty) Ltd to win onshore blocks 147, 159 and 153 in Peru's 2008 auction that saw bidding for 17 of the 22 oil and gas blocks on offer.

Reliance Exploration and Production DMCC, a fully-owned subsidiary of Reliance Industries, along with Chinese government-owned CNPC and Pluspetrol will explore gas in block 155, in the southern highland department of Puno, near the border with Bolivia.

The Reliance-CNPC-Pluspetrol consortium offered royalty of 24.58 per cent to Peruvian government while the Jindal-Enigma team offered 30.02 to 32.03 per cent royalty, sources said.

Reliance has steadily been increasing its presence in Peru since it acquired a 90 per cent stake in block 141 from Pan Andean Resources Plc in April this year.

Under the terms of acquisition, Pan Andean will dilute its interest in block 141 to 10 per cent, in return for Reliance Industries incurring 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.