RIL exits Myanmar blocks, gives up last conventional oil & gas asset abroad

Mukesh Ambani-led Reliance Industries Ltd (RIL) has exited its last overseas conventional oil and gas assets by relinquishing two blocks in Myanmar.

However, the company still holds its interest in two shale gas assets in the United States. In an investor presentation after the second quarter results, the company said that on completion of the study and technical evaluation, blocks M17 and M18 in Myanmar were relinquished. RIL had 96 per cent stake each in the two blocks, which were awarded to the company in 2015.

Early this month, the company had sold its stake in the Marcellus Shale asset, which was one of its three shale gas blocks in the United States, where it had a joint venture with Carrizo Oil & Gas Inc for $126 million. Though the Mumbai-based company has invested $9 billion in the US assets, it was getting negative returns from them owing to lower crude oil prices, which made shale production unviable.

Now, RIL holds 45 per cent stake with Pioneer Natural Resources in the Eagle Ford shale asset and 40 per cent with Chevron at Marcellus shale play.

"Reliance signed agreements to divest all of its interest in the upstream shale gas assets operated by Carrizo. (The) transaction is expected to close by the end of third quarter of FY18,” the presentation said.  

The company had marked its presence in countries like Yemen, Peru, Oman, Myanmar, Columbia, East Timor, Kurdistan, and Australia by acquiring conventional oil and gas assets over the past ten years through its subsidiary Reliance Exploration and Production (REP). However, it exited almost all these blocks later as part of its portfolio rationalisation due to low viability. From having almost 16 assets abroad, the company is left with no conventional blocks following the Myanmar relinquishment.  

In India, RIL holds stakes in the Krishna Godawari basin, Mahanadi basin, Saurashtra basin, and the Panna/Mukta and Tapti fields. During the financial year 2016-17, RIL’s revenues from its domestic oil and gas operations declined by 34.6 per cent to Rs 2,787 crore on account of a 23 per cent decline in production and reduced gas price realisation.

In June this year, Ambani and BP Plc chief executive Bob Dudley had announced investments worth Rs 40,000 crore on three discoveries in the Eastern offshore KG basin. This is expected to increase the gas output by 30-35 metric standard cubic meter per day (mmscmd). The output from KG-D6 has now dropped to about 6 million mmscmd, from 54 mmscmd in 2010.