Chevron buys Atlas Energy, takes over RIL JV

RIL will continue to fund 75% of the operator’s drilling costs.

Chevron Corp’s decision to buy producer has brought the two former partners – Chevron and Ltd (RIL) – together, after the American company had exited in April last year.

Chevron will take over Atlas’s role as the operator of a joint venture in the Marcellus shale gas assets, with RIL having 40 per cent stake (or approximately 137,000 acres) in the project. RIL will continue to fund 75 per rcent of the operator’s drilling costs, of up to $1.4 billion.

In April this year, had entered into a joint venture with RIL to develop the Marcellus assets. Under the agreement, RIL holds 40 per cent stake of the 343,000 acres shale gas project, spaning parts of Pennsylvania, West Virginia and New York. RIL was to invest $1.36 billion to develop the resources and Atlas was the operator.

The agreement between Chevron and Atlas states that the former will assume Atlas Energy’s role as the operator with 60 per cent participation in the Marcellus joint venture, under the original agreement terms between and RIL.

“Chevron buying out Atlas is certainly a positive for Reliance Industries. For, RIL will get a partner like Chevron in the Marcellus shale gas joint venture who has deep pockets and world class technology in developing shale gas assets. For like Atlas, they would have bought these shale assets pretty early and it was evident that they would be selling out at later stage,” said an analyst from a leading consulting firm, requesting anonymity.

In 2006, Chevron had acquired five per cent stake in for around $300 million, before the Indian company went for a mega IPO of over Rs 8,100 crore. The share sale agreement between the two had also given Chevron the option to buy an additional 24 per cent on conclusion of certain “collaboration agreements” under which the US firm was supposed to provide 35 per cent of the crude oil requirements of the new Jamnagar refinery and buy 45 per cent of the refined products for 10 years. However, the company exited in April last year after selling the stake at the acquisition cost.

image
Business Standard
177 22
Business Standard

Chevron buys Atlas Energy, takes over RIL JV

BS Reporters  |  New Delhi/Mumbai 

RIL will continue to fund 75% of the operator’s drilling costs.

Chevron Corp’s decision to buy producer has brought the two former partners – Chevron and Ltd (RIL) – together, after the American company had exited in April last year.

Chevron will take over Atlas’s role as the operator of a joint venture in the Marcellus shale gas assets, with RIL having 40 per cent stake (or approximately 137,000 acres) in the project. RIL will continue to fund 75 per rcent of the operator’s drilling costs, of up to $1.4 billion.

In April this year, had entered into a joint venture with RIL to develop the Marcellus assets. Under the agreement, RIL holds 40 per cent stake of the 343,000 acres shale gas project, spaning parts of Pennsylvania, West Virginia and New York. RIL was to invest $1.36 billion to develop the resources and Atlas was the operator.

The agreement between Chevron and Atlas states that the former will assume Atlas Energy’s role as the operator with 60 per cent participation in the Marcellus joint venture, under the original agreement terms between and RIL.

“Chevron buying out Atlas is certainly a positive for Reliance Industries. For, RIL will get a partner like Chevron in the Marcellus shale gas joint venture who has deep pockets and world class technology in developing shale gas assets. For like Atlas, they would have bought these shale assets pretty early and it was evident that they would be selling out at later stage,” said an analyst from a leading consulting firm, requesting anonymity.

In 2006, Chevron had acquired five per cent stake in for around $300 million, before the Indian company went for a mega IPO of over Rs 8,100 crore. The share sale agreement between the two had also given Chevron the option to buy an additional 24 per cent on conclusion of certain “collaboration agreements” under which the US firm was supposed to provide 35 per cent of the crude oil requirements of the new Jamnagar refinery and buy 45 per cent of the refined products for 10 years. However, the company exited in April last year after selling the stake at the acquisition cost.

RECOMMENDED FOR YOU

Chevron buys Atlas Energy, takes over RIL JV

RIL will continue to fund 75% of the operator’s drilling costs.

RIL will continue to fund 75% of the operator’s drilling costs.

Chevron Corp’s decision to buy producer has brought the two former partners – Chevron and Ltd (RIL) – together, after the American company had exited in April last year.

Chevron will take over Atlas’s role as the operator of a joint venture in the Marcellus shale gas assets, with RIL having 40 per cent stake (or approximately 137,000 acres) in the project. RIL will continue to fund 75 per rcent of the operator’s drilling costs, of up to $1.4 billion.

In April this year, had entered into a joint venture with RIL to develop the Marcellus assets. Under the agreement, RIL holds 40 per cent stake of the 343,000 acres shale gas project, spaning parts of Pennsylvania, West Virginia and New York. RIL was to invest $1.36 billion to develop the resources and Atlas was the operator.

The agreement between Chevron and Atlas states that the former will assume Atlas Energy’s role as the operator with 60 per cent participation in the Marcellus joint venture, under the original agreement terms between and RIL.

“Chevron buying out Atlas is certainly a positive for Reliance Industries. For, RIL will get a partner like Chevron in the Marcellus shale gas joint venture who has deep pockets and world class technology in developing shale gas assets. For like Atlas, they would have bought these shale assets pretty early and it was evident that they would be selling out at later stage,” said an analyst from a leading consulting firm, requesting anonymity.

In 2006, Chevron had acquired five per cent stake in for around $300 million, before the Indian company went for a mega IPO of over Rs 8,100 crore. The share sale agreement between the two had also given Chevron the option to buy an additional 24 per cent on conclusion of certain “collaboration agreements” under which the US firm was supposed to provide 35 per cent of the crude oil requirements of the new Jamnagar refinery and buy 45 per cent of the refined products for 10 years. However, the company exited in April last year after selling the stake at the acquisition cost.

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard