Chevron Corporation subsidiaries have acquired Reliance Industries’ interests in two blocks in Iraq’s Kurdistan region.
With this, Chevron follows rival Exxon Mobil into the region. Chevron will acquire Reliance Exploration & Production DMCC’s 80 per cent interest and operatorship of the production sharing contracts covering Rovi and Sarta blocks, a company statement said.
According to reports coming in, the deal is worth about $200 million.
Reliance’s move to exit the blocks does not come as a surprise for industry trackers. The company has been focusing more on producing assets rather than exploratory acreages. Most global exploration and production companies prefer acquiring stake in producing assets as that cuts down on financial risks.
In a separate statement, Reliance said its exit from the blocks is in line with its portfolio rationalisation strategy of international assets, and to create value for the exploration and production segment.
The blocks are located north of Erbil and cover a combined area of approximately 490 square miles (1,124 square km). In 2007, RIL had paid $15.5-17.5 million to the Kurdish Regional Government for the two blocks. The blocks have one billion barrels of oil reserves.
Chevron subsidiaries will partner OMV Rovi GmbH and OMV Sarta GmbH, which hold 20 per cent interest in Rovi and Sarta PSCs, respectively.
Today, Reliance has eight oil and gas (conventional) overseas blocks, down from 12. It has assets in Peru, Colombia, Australia and Yemen. It also has shale gas assets in the US.