HPCL arm to buy stake in two gas fields in Australia for $74M

Company will grab 11.25% interest in T/L1 and a 9.75% interest in T/18P of Trefoil field

Hindustan Petroleum Corporation Ltd (HPCL) subsidiary Prize Petroleum has signed a deal to acquire stakes of Australian major AWE Ltd in two fields of that country.

The wholly-owned subsidiary of HPCL would grab 11.25% interest in T/L1, part of  BassGas infrastructure and Yolla field, and a 9.75% interest in T/18P of Trefoil field in Australia for $85 million. The field is held by a consortium in which  Origin Energy , AWE and Toyota Tsusho are the major partners.

“The fields are located in shallow water in Bass basin between mainland Australia and Tasmania offshore Victoria. In addition to the field, the acquisition will also entail a stake in offshore platform, gas processing plant and a 147 kilo metre subsea pipeline.  Production from Yolla mainly comprises of Gas, LPG and condensate,” HPCL said in a statement today.  

According to a statement buy the Australian Stock Exchange listed AWE, it will receive A$80 million upon completion of the sale with a further A$5 million deferred payment payable upon meeting conditions like completion of the BassGas Mid Life Enhancement (MLE) project (drilling of two development wells and installation of gas compression) and if the MLE project costs do not exceed an agreed threshold.

The sale is subject to standard joint venture and government approvals for a transaction of this nature including the Australian Foreign Investment Review Board and the Reserve Bank of IndiaAt completion, AWE will hold 35% in T/L1 and 35% in T/18P.  

AWE’s Managing Director, Bruce Clement, said, “The release of capital from the BassGas asset will further strengthen our financial position and reduce AWE’s exposure to capital commitments for the final stages of the MLE project. Our remaining 35% interest in BassGas is an appropriate holding in this nonoperated asset and, importantly, maintains our voting rights at a level that provides control over major investment decisions.”