Hardy Oil in talks to buy RIL stake in Gujarat gas block

Britain's Hardy Oil and Gas on Thursday said it is in talks to acquire Reliance Industries' (RIL) complete 90 percent stake in a gas discovery block on the western offshore, off the Gujarat coast.

"We have a clear plan to acquire a further interest in, and operatorship of, our GS-01 asset," Hardy said in its half-yearly operations report.

It said the process was pending the resolution of a long-standing liability associated with unfinished minimum work programme that is under consideration with the Indian government since 2009.

Claiming that reserves discovered so far are not economically significant, RIL has said it wants to exit the Gujarat-Saurashtra offshore basin block.

Hardy said: "A number of high level meetings were held with DGH (director general hydrocarbons) and ministry representatives to facilitate the timely conclusion to Hardy's acquisition of Reliance's 90 percent interest and operatorship."

"General commercial terms have been agreed and a draft farm-out agreement is under review by both parties," it added.

Hardy-Reliance have told the government that the matter of possible liquidated damages for the two firms not completing their committed drilling programme, which is under consideration of the government since 2009, needs to be closed out before finalising the acquisition process.

"A field development plan for the Dhirubhai 33 natural gas discovery was submitted to the government for review and approval in 2012. The development plan provides for several dry tree wells, an unmanned platform, multiphase pipeline to shore and onshore processing and export facilities," Hardy said.

"Both parties have made a constructive proposal to the government of India to fulfil the unfinished minimum work programme liabilities, but we are awaiting a response," it added.

The British firm currently owns 10 percent stake in the block where the gas discovery Dhirubhai-33 (D-33) was made in 2007.

Hardy, along with RIL, have relinquished block KG-DWN-2003/1 (KG-D3) due to access restrictions imposed by the government.