Varun Group sells 51-per cent stake in Madagascar oil block to Chinese firm for $150 million
27 December 2011
Varun Industries Ltd has received upfront payment of $150 million for ceding 51 per cent stake in an onshore oil exploration block (oil block 3101) in Madagascar to Da Qing group of China.
The onshore oil block 3101 at Madagascar is a special purpose vehicle of Varun Group company Sure King Varun Hong Kong Ltd Da Qing Oil Field Company, China, the company said in a filing with the Bombay Stock Exchange.
Varun group, which holds exploration rights for a 6,884 square km onshore oil block at Madagascar, has entered into a joint venture co-operation agreement with Sure King Varun Hong Kong.
SKVHL is a special purpose vehicle (SPV) formed at Hong Kong between Varun group and Da Qing Oil Field Company, a leading oil firm in China.
Under the agreement, Varun group will cede 51 per cent of its stake in the oil field to Da Qing group of China through the SPV.
Da Qing group has committed to arrange for oil exploration and necessary fund raising process for the programme and pay $150 million as upfront money towards consideration to Varun group for ceding 51 per cent stake in the block.