State-owned Hindustan Petroleum Corp (HPCL) and its partners will divest 40% of their stake in a gas-bearing block in offshore Australia to US-based Apache Corp.
"We have agreed to farm-out a part of out stake in WA-388-P to Apache," HPCL Chairman and Managing Director Subir Roychowdhary said in New Delhi.
HPCL, Bharat PetroResources Ltd - a unit of state-owned Bharat Petroleum Corp (BPCL), Gujarat State Petroleum Corp (GSPC) and Videocon Industries each have 14% interest in the block. Post divestment, their stakes will reduce to 8.4% each.
Besides, South African energy firm Sasol has 30% interest and Australia's Oilex Ltd holds the remaining 14% stake in the gas field. Post Apache entry, Sasol and Oilex holdings will be reduced to 18% and 8.4%, respectively.
"Apache, which will take operatorship of the block from Oilex, will bear all of the cost of first exploration well on the block," he said, adding that HPCL and its partners would not have to bear any expense on drilling or testing of the well.
Rig has been contracted for drilling the first well, which will be spud by early 2011.
WA-388-P permit, located on the North West Shelf, contains seven prospects ranging in potential size from 0.3 to 2.8 trillion cubic feet of prospective gas resource.
The block lies north of the Pluto, Wheatstone, Gorgon and North West Shelf fields, offshore Western Australia.
Apache has contracted the Stena Clyde drilling rig to drill the first exploration well. The well will target a prospect in the Intra Mungaroo channel zone and is expected to spud in early 2011.