Mumbai: Billionaire Dilip Shanghvi’s Sun Oil and Natural Gas has bought a 33.3% stake in the Hazira oil and gas field from Canada’s Niko Resources Ltd and is in talks to buy the rest from Gujarat State Petroleum Corp. Ltd (GSPC), two officials aware of the development said.
The deal value, however, could not be ascertained. Niko has operated the field for 22 years.
Sun Oil and Natural Gas is a unit of Shanghvi’s Sun Petrochemicals Pvt. Ltd while GSPC is 87% owned by the Gujarat government. The Hazira field is part of 16 hydrocarbon assets in Gujarat’s Cambay basin where GSPC holds stakes.
“Niko Resources has sold its stake to Sun Oil and Natural Gas. If GSPC decides to sell its stake to Sun too, then Sun will be the 100% operator of the field,” said an official aware of the development, one of the two cited earlier. He spoke on condition of anonymity as he is not allowed to speak to reporters.
Niko Resources and Sun Oil and Natural Gas did not reply to questions emailed on Monday.
On 22 November, Mint had reported that Sun Oil was in talks with Niko Resources and GSPC to acquire their stakes.
Currently, the Hazira field produces 1,300-1,400 barrels of oil per day (bopd) and 7-9 million standard cubic feet of gas per day .
Niko is also a 10% partner in Reliance Industries Ltd’s (RIL) and BP Plc’s D6 block in the Krishna-Godavari (KG) basin. It has been facing financial headwinds owing to which on 9 November it said it would sell its stake.
Last November, Niko relinquished its 10% stake in another block, NEC-25, off the Odisha coast, to its existing partners RIL (60%) and BP.
An official from GSPC, the second person, said the company will be able to decide on selling its stake in a few days. “Sun Oil and Natural Gas has bid for our stake in the Hazira field. However, we are yet to open the technical bids and decide on who should the field go to,” the official added.
GSPC has hired consulting firm EY to re-evaluate its onshore exploration and production assets as part of a business restructuring exercise.
In addition to Hazira, GSPC has also signed agreements to sell stakes in some other assets including the Deen Dayal field, GSPC’s primary asset, located off the coast of Andhra Pradesh.
GSPC approached Oil and Natural Gas Corp. Ltd (ONGC) to sell a stake in the Deen Dayal field earlier this year. GSPC is the operator of the block with 80% participating interest in it. On 25 September, ONGC board approved a preliminary agreement to buy this stake.