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Essar Energy sells 50% stake in Vietnam gas block to ENI International
Essar Energy

In order to help manage risk and to focus more on developing its core assets, Essar Energy Plc.’s subsidiary Essar Exploration and Production Ltd., will induct ENI International B.V as an equal partner in its Vietnam’s offshore gas exploration block 114, making it the operator of the block. The company did not disclose financial details.

This is the third acquisition of assets for ENI in Vietnam after it bought 50 per cent operating stakes in two other exploration blocks in the Song Hong and Phu Khanh basins in the Gulf of Tonkin, last Monday.

The reduction of stake in the block, in which Essar Energy acquired 100 per cent stake in 2007 from the Vietnam government, is in line with its exploration and production business thinking of introducing strategic partners to help manage risk and to focus on the its core assets, the company said in a statement.

“The block (114) has great potential and is located in an area where there have recently been significant exploration successes in nearby blocks,” ENI said in a statement. Post the acquisition of the 100 per cent stake in the block, Essar Energy had entered into a production sharing contract with the Vietnam government, effective 2010. The stake sale to ENI, subject to approval from the Vietnam government, will bring in the capital for further exploration.

“Further investment is required to establish gas reserves in the block and no gas is being produced at present,” the company said. The exploration programme for the newly acquired block, which is approximately 5,900 square kilometers, includes a 3D seismic survey and the drilling of two wells.

Amsterdam based ENI International B.V., a subsidiary of ENI SpA of Italy, through its subsidiaries, engages in exploration, production, transportation, and marketing of oil and gas.

At 1200 GMT on Monday, Essar Energy’s stock was trading at £125.80 per share, up 3.12 per cent, from its Friday close on the London Stock Exchange.

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