The Oil India Ltd-Indian Oil Corporation partnership is expected to acquire participating interest in Houston-based Carrizo Oil & Gas's Niobrara shale gas asset in Colorado.

Market sources said an announcement would be made on Thursday. While financial details of the deal were not available, indications are that the two public sector undertakings are looking at a 30 per cent stake in the Carrizo’s shale gas asset, with Oil India holding 20 per cent and IndianOil 10 per cent.

For Carrizo, the Oil India-IndianOil venture is not the first Indian company with whom it will be doing business. Last year, GAIL (India) had acquired 20 per cent in Carrizo’s Eagle Ford shale acreage. Carrizo Oil also has a joint venture with Reliance Industries Ltd (RIL) for the Marcellus shale acreage in northern and central Pennsylvania.

Over the last decade, shale gas has changed the US oil and gas market. Following the recent commercialisation of shale gas resources in the US, there has been considerable availability of gas in that country, resulting in low Henry Hub prices (the benchmark price of gas in the US market) and increased possibility of LNG exports from the US.

However, exports to India would depend on whether the US decides to keep India outside the purview of free trade area/non-FTA framework.

Carrizo is a Houston-based energy company actively engaged in the exploration, development, exploitation, and production of oil and natural gas, primarily in the Eagle Ford Shale in South Texas, the Barnett Shale in North Texas, the Marcellus Shale in Appalachia, the Niobrara Formation in Colorado, the Utica Shale in Eastern Ohio, and in proven onshore trends along the Texas and Louisiana Gulf Coast regions. Carrizo is also actively developing its oil discovery known as the Huntington Field in the UK North Sea.

>richa.mishra@thehindu.co.in

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