You are here: Home » Companies » News
Business Standard

Oil India makes a play for US shale

Becomes the third Indian company to enter the fray in the US after GAIL and RIL

Kalpana Pathak  |  Mumbai 

State-run oil explorer Oil India is set to aquire shale assets in the US. The company is in talks with Carrizo Oil & Gas to acquire stake in Niobrara Shale in North Eastern Colorado.

“We are in advanced stage of discussions and will be announcing the deal soon,” said a senior Oil India executive. He, however, refused to divulge the details of the deal.

Analysts say since US shale gas prices are dipping, thanks to an uptick in production, the price at which Oil India enters will be crucial. Houston-based Carrizo Oil & Gas is an independent energy firm engaged in shale plays in the US and the UK. Its operations span the Barnett, Eagle Ford, Marcellus and Niobrara shale plays.

“Carrizo is in discussions with a number of These discussions, before the announcement of a formal agreement, are confidential,” said Richard Hunter, vice-president, investor relations, Carrizo Oil & Gas in an email response.

The company website says: “...In April of 2010, we announced the initiation of oil -focused horizontal development programs in the Eagle Ford Shale in South Texas where we have accumulated 41,000 net acres and in the Niobrara Shale in North Eastern Colorado, where we have accumulated 62,000 net acres. We have experienced impressive results in both these areas with 100 per cent drilling success and strong early production."

Last September, state-run GAIL had acquired 20 per cent stake at Carrizo’s Eagle Ford shale acreage in south Texas for $95 million. The acquisition was GAIL ’s first shale gas asset in the US. GAIL and its partners are expected to invest up to $300 million over the next five years at the field. GAIL acquired the stake through its wholly-owned subsidiary GAIL Global (USA) Inc.

Similarly, Mukesh Ambani-promoted Reliance Industries (RIL) holds 45 per cent stake in Eagle Ford and 60 per cent stake in a Marcellus Shale gasfield through a joint venture with Carrizo.

RIL’s shale gas business in the US comprises three upstream joint ventures with Chevron, Pioneer Natural Resource and Carrizo Oil & Gas, and a midstream joint venture with Pioneer. Aggregate investments since the inception of these joint ventures stood at Rs 22,000 crore ($4 billion) as at the end of the first quarter of this financial year.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, September 25 2012. 00:13 IST