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Rediff News  All News  » Business » RIL wins exploration rights in East Timor

RIL wins exploration rights in East Timor

May 24, 2006 02:56 IST

Reliance Industries Limited has won petroleum exploration rights in an oil and gas offshore block in Timor-Leste, world's newest nation, outbidding global oil majors.

Italy's ENI SPA has won five blocks. Apart from ENI and RIL, global majors such as Indonesian state-run Petronas, Brazil's Petrobras and Portugal's GALP were in the race for offshore blocks in Timor-Leste -- commonly known as East Timor.

East Timor Prime Minister Mari Alkatiri said in a statement that Reliance and ENI would sign production-sharing contracts with the government by next month.

Profits from these areas are to be split in 60:40 ratio between the operator and the government, with foreign operators also paying a 5 per cent royalty fee to the government. The size of the deal and the oil and gas reserve in these blocks is not known.

From the 11 contract areas available in the first bidding round, six had received offers from the international companies. The offer for these 11 contract areas covers a total 30,000 square kilometers.

The deadline for companies to hand in proposals for the Timorese offshore tenders ended on last April 19 and the East Timor government received nine proposals for the six blocks.

East Timor is planning to launch an international tender for onshore oil exploration by the end of this year also.

Among RIL's overseas operations, it has exploration rights to one of the large deepwater blocks in the Sultanate of Oman. In addition, it has a 25 per cent stake in an exploration block in Yemen, which has struck oil. Reliance is looking to expand its overseas ventures aggressively in Yemen, Sudan and Colombia.

Nevin John in Mumbai