In a sale that could fetch close to $4.5 billion or Rs. 27,000 crore to the Mukesh Ambani’s Reliance Industries Ltd (RIL), the company is contemplating to sell its 45% stake in the Eagle Ford basin shale oil and gas venture in the US.
RIL, which bought 45% interest in Pioneer Natural Resources Co’s Eagle Ford shale formation of south Texas for $1.3 billion, is reported to be working with Citigroup Inc and Bank of America Merrill Lynch to find a buyer, industry sources said.
RILs total investment in US is $ 7.36 billion.
“Reliance constantly strives to identify means by which to create additional value for its shareholders” but was all the RIL spokesperson had to say regarding the sale.
“It is Reliance’s policy not to comment on market speculation. If there are any required disclosures, Reliance will make them at the appropriate time,” the spokesperson said.
Pioneer holds 46% in the Eagle Ford venture while the remaining 9% is with Alpha SAB’s Newpeck LLC.
Newpek too is exploring opportunities to sell its share and is being advised by Tudor Pickering Holt & Co.
RIL, in a July presentation to investors, had stated that it has invested a total of $ 3.91 billion in Pioneer joint venture since inception. Four hundred and seventy two wells have been drilled to date with an average production rate of 676 million standard cubic feet per day.
The Eagle Ford assets spread over 230,000 acres have become more attractive after the US Commerce Department in June gave Pioneer permission to export a type of ultralight oil known as condensate produced from the region.
The approval will “help ease pressure on differentials, which has remained key challenge,” RIL had stated in the presentation.
Besides Eagle Ford, RIL has two more shale ventures in US — 40 per cent stake in Chevron’s Marcellus shale acreage and a 60 per cent interest in Carrizo Oil and Gas Inc’s Marcellus shale acreage in Central and Northeast Pennsylvania.