Arun Jagatramka-owned Gujarat NRE group has sold off its entire stake in two oil exploration blocks in Australia.
The group has divested its entire shareholding in Gujarat NRE Oil, controlled by group holding arm Gujarat NRE Mineral Resources, to Australian Stock Exchange-listed Buru Energy.
The deal has been valued at Aus $36 million, or Rs192 crore, in cash. “The completion of the purchase under the agreement is subject to standard terms and conditions and warranties and is expected to take place on or about October 4,” Buru Energy has disclosed.
Gujarat NRE Oil owned a 90% stake in two onshore exploration blocks in Australia — EP457 and EP458 — covering an area of 10,640 sq km in the highly prospective central Canning Superbasin in the southwest Kimberley region of Western Australia. Rey Resources, another listed Australian company, held the remaining interest in the permits.
“Under a pre-existing farm-in arrangement with Gujarat NRE, Rey Resources’ share of exploration costs will continue to be free and carried by Gujarat NRE through to the establishment of production from the permits, when any costs will be repaid from production,” Rey Resources has said.
“Rey Resources is currently considering its options with respect to its preemptive rights under its farm-in arrangements with Gujarat NRE,” it said.
Rey Resources applied for the exploration blocks in 2004 and Gujarat NRE Oil went for a joint venture with it at participating interest in 2006. Since then, it has carried out initial work on developing the permits, and last year completed milestones like getting no-objection permits from pastoral lease owners for regulatory surveys, heritage site clearance survey and declared rare flora survey.
Gujarat NRE Oil would have progressed on the seismic survey by now, sources said. “Due to bad weather conditions in the second half of the year, we were unable to conduct any seismic survey as per the schedule. We are hopeful of conducting the proposed 2D seismic survey in 2012-13, including detailed data processing, interpretation and and identification of the location of wells for exploratory drilling,” Jagatramka noted in the annual report of Gujarat NRE Mineral Resources.
Exploration licences were allotted for a period of six years starting October 2007, and subsequently extended till 2015.
Jagatramka, who is currently in Australia for the deal, couldn’t be reached for comment.