India’s public sector oil marketing company Bharat Petroleum Corporation Ltd (BPCL) has entered into an agreement with the Australian energy major Norwest Energy for acquisition of shale gas acreage in the Perth Basin in Australia. BPCL shares went up Rs 21.9 or 3.24% to close at Rs 697.85 on BSE today.
BPCL, through its 100% subsidiary, Bharat Petro Resources Ltd (BPRL) has executed a letter of intent with an ASX-listed company Norwest Energy for farming in two exploration acreages in the Perth Basin EP413 and TP/15, which hold shale gas potential, a statement to BSE said. BPRL’s commitment for these projects is up to A$15 million (approx. $13.5 million) for exploration and drilling finding, including a carry of part of Norwest’s share of the investment.
Reliance Industries (RIL), India's largest private company, also had strengthened its presence in the shale gas space with acquiring three shale-gas assets in the US in less than four months. Early this month, RIL acquired a 60% stake in acreages held by Carrizo Oil & Gas and its partner for $392 million.
BPRL will acquire half of Norwest’s interest in each of these blocks. Hence, BPRL, upon execution of the transaction and its subsequent approval by the concerned Australian authorities, would hold a 50% interest in TP 15 and a 27.8% in EP413. Wells are due to be drilled in both the permits within a year’s time.
Norwest currently holds 100% interest in TP 15 and 55.6% interest in the EP413 block, while Australia Worldwide Exploration (AWE) is also a joint venture partner in this block with 44.2% interest. The energy major is the operator in both these blocks.
BPRL already has interest in two exploration permits in the Australian region and the current acquisition besides enabling further consolidation of the Australian position, would also offer BPRL an entry into a new play, i.e. Shale Gas.