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State-run firms Indian Oil Corp and Oil India Ltd will together take 25 per cent stake in Reliance Industries Ltd's East Timor oil and gas block.
Reliance Industries, which holds 100 per cent stake in the offshore block, is getting the state-run firms to share exploration risk. IOC and OIL, who will take 12.5 per cent stake each, will share past exploration cost in the Block 'K' in proportion to their equity stake, industry sources said.
OIL-IOC combine is also paying a small premium to Mukesh Ambani-run RIL for the farm-in opportunity. Boards of both IOC and OIL have approved the stake in the 2,384 square kilometer exploration acreage where Reliance will be the operator.
Reliance had in May 2006 won the offshore area 'K' in the East Timor bid round, where 11 offshore blocks were offered. Reliance bid for areas 'K' and 'E' but won only the former.
OIL-IOC combine last month won four blocks in Libya. The combine forged a 50:50 partnership with Algerian national oil firm Sonatrach to win areas 95 (one block) and 96 (three blocks) located in the western Ghadames basin in Libya. The combine had in 2005 won 7,087 sq km Block 86 and 2,710 sq km Block 102/4 in Libya. Both hold 50 per cent stake in each and OIL is operator for both.
Prior to East Timor, the combine had oil acreage in five countries - Farsi Block in Iran, exploration blocks in Libya, Block Shakthi in Gabon, OPL-205 in Nigeria and Blocks 82 and 83 in Yemen.
Reliance has nine properties in five countries - Blocks 9, 34 and 37 in Yemen, Blocks 18 and 41 in Oman, Block 'K' in East Timor, Block WA-405-P in Australia and Blocks Rovi and Sarta in Kurdistan region of Iraq.