Days after India?s largest private sector company, Reliance Industries (RIL), announced its third acquisition of US shale gas assets, state-owned Bharat Petroleum Corporation (BPCL) on Friday announced its plans to explore the emerging alternative energy segment. BPCL said its overseas exploration & production subsidiary, Bharat PetroResources (BPRL) has entered into an agreement with Australia?s Norwest Energy for farming two exploration acreages in the Perth basin (code named EP413 and TP/15), which hold shale gas potential.
“BPRL?s commitment for these projects is up to A$15 million ($13.5 million or Rs 62 crore) for exploration and drilling funding, including a carry of part of Norwest?s share of the investment,” a media release said.
The acquisition will present BPRL with preparedness and possibly an early mover advantage when shale gas acreages are offered for bidding in India in the future, the company said. Once the transaction is completed, BPRL?s asset portfolio would comprise a total of 28 blocks, 19 of them outside India.
Shale gas ? natural gas produced from shale, a fine-grained sedimentary rock ? is becoming an increasingly important source of natural gas across the globe. Over the next decade, shale gas is expected to contribute over 20% to overall gas production in the US. Earlier this month, RIL entered into a joint venture with US-based Carrizo Oil & Gas to acquire a 60% stake in Marcellus shale acreage in Central and Northeast Pennsylvania. RIL has also bought 40% stake in Atlas Energy, and 45% in Pioneer Natural Resources? core Eagle Ford Shale acreage position.
RIL, which had ramped up gas production at the KG basin and is beefing up its global presence in conventional and alternative energy, has committed $3.4 billion (around Rs 15,600 crore) in US shale gas assets this year.
BPCL said that Norwest currently holds 100% interest in TP/15 and 55.6% in EP413. It also operates both the blocks. Australia Worldwide Exploration is also a joint venture partner in EP413 with 44.25% interest. Wells are due to be drilled in both the permits within a year?s time. BPRL will acquire half of Norwest?s interest in each of these blocks. ?BPRL, upon execution of the transaction and its subsequent approval by the concerned Australian authorities, will hold 50% interest in TP/15 and 27.8% interest in EP413,? the company said. BPCL shares gained 3.2% on the BSE on Friday to close at Rs 697.85.
?BPRL already has interests in two exploration permits in the Australian region, and the current acquisition, besides enabling further consolidation of the Australian position, would also offer BPRL entry into a new play, viz. shale gas,? the company said.
The blocks are located near existing pipeline networks which connect to consumption centres. Current consumption patterns, as well as future projected requirements, indicate a significant demand for gas in the West Australian region in the future, it said.
