Essar Energy Plc will sell half its stake in Vietnam’s offshore gas exploration block 114 to Italian oil major ENI International B.V.

Essar holds interest in the block through its subsidiary Essar Exploration & Production Limited.

The transaction is subject to the Vietnam Government approval.

“The reduction in Essar Energy’s stake in block 114, which was previously 100 per cent, is in line with the strategy of bringing in strategic partners to help manage risks and focuson the development of its core assets,” the company said in a statement.

Essar Energy acquired the block in 2007. It signed a production sharing contract with the Vietnam Government in 2010.

Essar Energy did not disclose the value involved in the transaction.

Neither did the company give any details on further explorations to be carried out in the block.

Further investment is required to establish gas reserves in the block; no gas is being produced at present.

Under the terms of the transaction, ENI is also assuming operator status for the block, Essar said.

siddhartha.s@thehindu.co.in

(This article was published on July 2, 2012)
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