New Delhi, Aug. 10 (PTI): Reliance Industries has sold a 25 per cent stake in an oil block in Yemen to Indonesia’s Medco Energi for about $90 million, the firm’s second overseas stake sale in one month.
According to industry sources, RIL’s Dubai-based subsidiary — Reliance Exploration & Production DMCC — had signed agreements last month to sell a 25 per cent interest in producing Block 9 in Yemen to Medco Energi.
Earlier last month, the Mukesh Ambani-run firm exited two oil blocks in the Kurdistan region of Iraq.
In 2001, RIL had won Block 9 along with Hood Energy and Calvalley Petroleum Inc.
RIL and Hood Energy held 25 per cent stakes each, while Calvalley had the remaining 50 per cent.
Sources said RIL’s sale agreement with Medco would be effective from January 1.
While the agreement is for a 25 per cent interest, Medco will effectively have a 21.25 per cent participating interest in the block because, under a regulation in Yemen, the contractor of a production-sharing agreement has to accommodate a working interest for the country, represented by the Yemen Oil and Gas Company, which will hold a 15 per cent stake.
Accordingly, the operator Calvalley Petroleum would have a 42.5 per cent interest and Hood Oil a 21.25 per cent stake.
Block 9 covers 2,234 square kilometres in the Sayun-Masila basin in Yemen’s Hadramaut province, about 350 km northeast of Yemen’s capital, Sana. It is estimated to hold proven plus probable reserves of 58.6 million barrels of oil.
RIL will get another $5 million if the block produces 10,000 barrels of oil per day. The block now produces 6,000-6,500 barrels per day.