UK's Hardy Oil and Gas Plc on Friday said it will not exercise the option to raise its stake in a Reliance Industries-operated gas block, which is one of the 23 areas where the Mukesh Ambani-led firm is selling 30% interest to BP Plc for $7.2 billion.
Reliance is selling a stake in 23 oil and gas block it had won under various rounds of New Exploration Licensing Policy (NELP) rounds along with partners like Niko Resources of Canada and Hardy since 1999.
NELP allows firms to sell or farm-out participating interest (or stakes) subject to the preemption right of the consortium partner.
In a statement, Hardy said, "It has elected not to exercise an option to increase its participating interest by 3% in the D3 (KG-DWN-2003/1) exploration licence."
The UK firm holds a 10% stake each in the Reliance-operated D3 and D9 blocks in the Krishna-Godavari Basin and onland Assam-Arakan basin block AS-ONN-2000/1.
In each of the blocks, Hardy had an option to raise its stake by 10% of the interest that Reliance was selling to BP.
Hardy said it had previously waived its option in the case of D9 and the Assam block, but had retained it in the case of the D3 gas discovery block.
"If exercised, the consideration for the exercise of the 3% option in D3 would have been a cash payment by Hardy to Reliance of approximately $150 million, payable in three installments over a seven-month period from the closing of the BP acquisition," Hardy said.