India's Essar Energy said Monday that it has agreed to sell 50 percent of its stake in an offshore gas exploration block in Vietnam to Italy's Eni.
Under the agreement, Eni assumes its status as the operator for the block. Eni will also acquire a 3D seismic survey, and it will drill two wells on the block.
The disposal of its interest is "in line with the strategy for its exploration and production business of introducing strategic partners to help manage risk," Essar said in a statement.
Further investment is required to establish gas reserves on the block, also known as block 114, Essar added.
Block 114 is sited in the shallow waters of the Song Hong Basin, and it is estimated to have of one trillion cubic feet of gas resources. The block spans an area of 2,278 square miles (5,900 square kilometers).
Essar Energy attained full ownership of the block in 2007, and the company entered a production sharing contract (PSC) with state-owned PetroVietnam in 2010.
"The PSC has come into effect this year," a spokesperson with Essar told Rigzone.
The agreement between Essar and Eni is subjected to formal approval by the Vietnamese Government.
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