The Hindu Business Line : Reliance Ind set to buy majority stake in Peru oil block

Reliance Industries Ltd (RIL) is set to acquire majority stake in an oil block in Peru. The company is understood to have recently inked an agreement with Pan Andean for acquiring stake in Block 141 in Peru.

Sources told Business Line that an agreement has been signed between RIL and Pan Andean and now necessary approvals from higher authorities in Peru is awaited.

Pan Andean Resources explores and produces oil and gas in South America and the Gulf of Mexico.

Farm-in concept

Indications are that RIL is likely to acquire 90 per cent stake. Block 141 in the Lake Titicaca area of Peru is a large early stage oil exploration play. RIL has been pursuing contracts for farm-in activities in two oil blocks in Peru. Farm-in concept is a well accepted practice in the international scenario. Under this practice, a company does not acquire the property directly, but rather develops the oil and natural gas properties by taking participating interest in the block and also shares the risk involved in the exploration activity with the operator.

Other prospects

Reliance already has 11 overseas oil and gas assets, with the latest being a block in Australia. With the Peru block in its kitty, the number would go up to 12. The company is looking at opportunities in Africa, Latin America and West Asia.

Reliance was granted an exploration permit for block WO6-05 in the Bonaparte Basin in Western Australia, its first exploration block in the region, last year.

RIL also has two blocks in Iraq, three in Yemen, one in East Timor, and two each in Oman and Columbia.

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