Financial Daily from THE HINDU group of publications
Tuesday, Feb 21, 2006
Financial Daily from THE HINDU group of publications Tuesday, Feb 21, 2006 |
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Corporate
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Mergers & Acquisitions GAIL eyes majority stake in Ethiopian exploration firm Our Bureau
New Delhi , Feb. 20 GAIL (India) Ltd is looking at acquiring majority stake in an Ethiopian exploration company - SIL Ethiopia International (SILEI). SILEI is a subsidiary of Jordanian company SI-Tech International (SIL). According to a senior GAIL official, the company was in the process of awarding feasibility report for buying a majority stake in SILEI. GAIL is in talks with the Jordanian company, which has a stake in two gas fields in Ethiopia. In December 2003, SILEI had signed a petroleum development and production sharing agreement with the Ministry of Mines of Ethiopia. Ethiopia has assigned two exploration and production fields to SILEI - Calub and Hilala. The Calub gas reserves are estimated at 2.7 trillion cubic feet (TCF) while the Hilala gas reserves are estimated at 1.3 TCF. Ethiopia also plans to lay two pipelines - 80 km from Hilala to Calub and 700 km from Calub to Dire Dawa. SILEI's agreement with Ethiopia also provides for infrastructure development. On the sidelines of a gas summit here, a GAIL official told mediapersons that the consultant being appointed to conduct a feasibility study has been asked to look into the financial, technical and other aspects as well as formulate a bid for the company to buy SILEI's majority take in the two fields. GAIL is also looking at an investment of less than $1 billion on the acquisition. An important aspect that would determine GAIL's plans is whether the Ethiopian Government would be willing to give GAIL the same concessions that were awarded to SIL.
More Stories on : Mergers & Acquisitions | Petroleum | GAIL (India) Ltd
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