Reliance Exploration and Production DMCC, a fully owned subsidiary of Reliance Industries Ltd has sold its entire 25 per cent stake in Yemen Block 9 to Medco Yemen Malik Ltd, a unit of Indonesia’s PT Medco Energi Internasional, for $90 million.
While the agreement is for 25 per cent stake, Medco would have 21.25 per cent participating interest in the block after factoring in a proportionate carried share of Yemen Oil & Gas Corporation.
In 2001, RIL had won Block 9, along with Hood Energy and Calvalley Petroleum Inc. RIL and Hood Energy held 25 per cent stake each while Calvalley had the remaining 50 per cent.
The participating interest in the block has now changed with Calvalley owning 42.5 per cent as an operator. Medco and Hood Energy have 21.25 per cent each with the balance 15 per cent with Yemen Oil & Gas.
Located in the province of Hadramaut in the Republic of Yemen, Block 9 lies around 350 km north-east of the Yemen capital, Sanaa. Currently, the block produces 6,000-6,500 barrels of oil per day. RIL will get another $5 million if the block starts producing 10,000 barrels per day.
Founded in 2005, Dubai-based Reliance Exploration and Production DMCC is a trader of crude oil, petroleum and petrochemical products, and operates as a subsidiary of RIL.
In July this year, the firm sold its 80 per cent stake in Iraq-based Rovi and Sarta oil blocks to Chevron Corp and in February 2011, it sold a large minority stake in certain oil & gas blocks to BP.
RIL scrip was trading at Rs 835.15 a share, up 1.39 per cent at 2.45 pm on Wednesday in a strong Mumbai market.
(Edited by Sanghamitra Mandal)