India's state-owned natural gas processing and distribution company GAIL (India) Limited was reportedly holding talks with London-based Ophir Energy plc to acquire a 10-30 percent stake in five natural gas blocks in Tanzania, Indian daily The Financial Express reported Thursday.
The acquisition of a 10 percent interest in these blocks, with an in-place reserves of over 40 trillion cubic feet, could cost an estimated $600 million. GAIL's move into the upstream sector is an attempt to diversify gas supply sources as the firm meet its current demand through imported liquefied natural gas (LNG) and domestic sources.
“We are targeting East Africa and the U.S. for more natural gas assets. East Africa offers us geographical advantage owing to its proximity with India, while the U.S. shale boom has opened up various investment opportunities,” a GAIL official told The Financial Express.
Ophir confirmed Thursday news that it is looking to sell down its interests in Blocks 1, 3 and 4
"The Company can confirm it has a process ongoing to sell down a part interest in these Blocks but there is no certainty that this process will conclude successfully nor can there be any certainty over the value of any such deal if it were to complete. The Company will update the market further on this process as appropriate," Ophir said in a company release.
Ophir has interests in five blocks with a total area of 14,219 square miles (36,828 square kilometers) and in water depths up to 9,843 feet (3,000 meters). The company has 40 percent interest in Blocks 1, 3 and 4 as well as a 70-percent and 80-percent stake in East Pande and Block 7, respectively.
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