UK’s Hardy Oil & Gas in talks to buy outentire RIL stake in GS-1 block

RIL wants to exit Gujarat-Saurashtraoffshore basin block (GS-01) as it feelsthat reserves discovered so far are noteconomically significant.
NEW DELHI: UK’s Hardy Oil & Gas plc is in talks to acquire Reliance Industries’entire 90 per cent stake in a gas discovery block off the Gujarat coast.RIL wants to exit Gujarat-Saurashtra offshore basin block (GS-01) as it feelsthat reserves discovered so far are noteconomically significant.
“Hardy continued discussions with theoperator to acquire their 90 per cent interest and operatorship. General commercial terms have been agreed and a draft farmout agreement is under review by both parties,” the UK firm said announcing operational and financial review of 2014-15 fiscal.It said the agreement for transfer of interest and operatorship will be subject
to approval of the Government.Hardy currently owns 10 per cent interestin the block where a gas discovery,
named Dhirubhai-33, was made in 2007.
The well that discovered the reserves
flowed 18.6 million standard cubic feet
per day of gas and 415 barrels of
condensate during tests.
The GS-01 licence is located in the
Gujarat-Saurashtra offshore basin off the
west coast of India, northwest of the
prolific Bombay High oil field, with water
depths varying between 80 meters and
150 meters. The retained discovery area
covers 600 square kilometers.
Hardy said a field development plan (FDP)
for Dhirubhai 33 natural gas discovery
was submitted to the government for
review and approval in 2012.
A discovery was declared commercially
viable in 2011. The development plan
provides for several dry tree wells, an
unmanned platform, multiphase pipeline
to shore and onshore processing and
export facilities, it said.
“A draft farmout agreement is under
review by both parties and the final
outcome of these negotiations will be
known in the near term,” Hardy said.
It said timely resolution of liquidated
damages for unfinished minimum work
programme (or minimum work
committted) could accelerate conclusion
of the acquisition process.
“Following this, a priority will be to secure
government approval of the FDP and
initiate planning for development,” Hardy
said.
It along with Reliance have relinquished
block KG-DWN-2003/1 (KG-D3) due to
access restrictions imposed by the
government.
“On 23 December 2014, the D3
Management Committee considered a
proposal from RIL, the operator of the D3
block, in which Hardy holds a 10 per cent
interest, for the relinquishment of the
block,” the statement said.
RIL was of the opinion that the previously
announced access restrictions imposed
by the Ministry of Defence rule out any
further exploration/development activities
in the impact zone area and inhibited it
from undertaking any further work and
investment in the unrestricted area of the
Block due to the anticipated increase in
cost and risk.
D3 has similar participating interests as
GS-01. Four gas discoveries — Dhirubhai
39, 41, 44 and 52 (KGV-D3-A1, B1, R1
and W1), have so far been make in the
block.