BPCL exploration arm to sell stake in a few blocks abroad

Bharat PetroResources Ltd, wholly owned subsidiary of Bharat Petroleum Corporation (BPCL) for exploration and production (E&P), plans to divest stake in a few of its overseas blocks, D Rajkumar, managing director and CEO, Bharat PetroResources said.

The company has participating interest in 26 blocks in India and overseas.

“The blocks in which we are looking at divesting are all in exploratory stage and we will divest in the form that we will give some acreage to a company and use that money for drilling or other exploration,” Rajkumar said.

“We are looking at divesting in some of these blocks outside the country. We are doing one right now. We do not have intentions to get a plot, add value and get out of it; we will definitely be there and do good projects. What we can look at divesting is which are high priority,” he said.Bharat PetroResources plans to spend `7,500 crore by 2015 in its global search for energy fuels. Of this, `3,000 crore would be for exploration, `3,500 crore for developmental and data congregation in Mozambique, Indonesia and Latin America, and `800 crore for new initiatives such as shale gas.

The company plans to get money for drilling through divestment. “As these blocks are all in the exploration phase, so we will not be getting the money into the company through divesting. We will get the money basically for ongoing exploration in these projects,” said Rajkumar.Bharat PetroResources has identified three key assets where it will invest more for development and exploration. These are in Latin America, East Africa and Asia.

“Our present investment in Brazil and Mozambique is `700 crore, which will go up to `3,000 crore,” S Radhakrishnan, director marketing, BPCL said.

Besides India, the company has blocks in Australia, Brazil, East Timor, Indonesia, Mozambique and the United Kingdom with an approximate acreage of 81,000 sq km, of which 91% is offshore.It plans to become a key operator in India by 2012-13, from being a joint operator with Hindustan Oil Exploration Co Ltd now.“We are very much looking at operatorship in the country, but not abroad, that too mostly in offshore,” Rajkumar said.In its international venture in Brazil, Andarko is the operator. Thus, for future pitches, Andarko will take BPCL along with it.“BP will come in one of the blocks and we have at present 28 E&P blocks. Thus, we are not looking at acquiring anything right now unless it is very value accretional. Our assets are in development stage we are looking for production and once that happens we can look for equity participation,” said Rajkumar.

Bharat PetroResources is close to spending $15 million for shale gas in Australia. It has entered into an agreement with Northwest Energy for farming in two acreages in the Perth basin and is awaiting approval from the Australian government.“Though it is not a big investment we are doing it as a learning curve so that when Indian blocks are opened for bidding, we can participate in it.”

BPCL is also looking at alternatives to sell its shale gas in South Africa and Japan or bring it to India, though no final decision has been taken. From 2013, it expects both oil and gas to start production from Mozambique and Brazil.

Shale gas uses horizontal drilling and cost-intensive technology.