State-owned gas utility GAIL (India) Ltd has initiated the process to exit its shale gas venture in the United States, mirroring moves by Reliance Industries Ltd and Oil India Ltd.
India’s largest gas transportation and marketing company has invited bids to sell its 20 per cent stake in Eagle Ford Shale Assets, Texas, according to a tender document. The deadline for submissions is February 14, with the transaction set to take effect from January 1, 2025.
A company official cited low US gas prices as the primary reason for the divestment. “We are not making much money there,” the source said at India Energy Week. “If the venture is unprofitable, questions will arise.”
GAIL entered the US shale sector in 2011, acquiring its stake in Nasdaq-listed Carrizo Oil & Gas Inc’s Eagle Ford acreage for $95 million. The asset, spread over 20,200 acres, gave GAIL Global (USA) Inc — its wholly owned subsidiary — 4,040 net acres in four Texas counties. GAIL and its partners had committed around $300 million over five years for development, in addition to GAIL’s acquisition cost of $63.7 million and a $31.3 million carried interest for future drilling.
Currently, the Eagle Ford asset produces 3,681 barrels of oil and 5,368 cubic feet of gas per day. GAIL’s move follows Reliance Industries’ 2021 exit from US shale after selling its last Eagle Ford asset to a Warburg Pincus-backed firm. Earlier, it had divested its Marcellus shale stake. In 2022, Oil India Ltd offloaded its 20 per cent Niobrara shale asset stake in Colorado to Verdad Resources LLC for $25 million.
IOC deal with UAE
Indian Oil Corporation (IOC), the nation’s largest oil firm, has signed a long-term deal worth $7-9 billion to import liquefied natural gas (LNG) from the United Arab Emirates (UAE).
Under the agreement, IOC will receive 1.2 million tonnes per annum (mtpa) of LNG from 2026 for 14 years.
“Adnoc Gas has signed a 14-year sales and purchase agreement with Indian Oil Corporation Ltd for the export of up to 1.2 mtpa of LNG, supplied from the Das Island liquefaction facility,” Adnoc Gas said.
Adnoc Gas is the state-owned oil company of the UAE
