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Reliance, Chesapeake end Eagle Ford JV talks

Reliance, Chesapeake end Eagle Ford JV talks
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First Published: Wed, Oct 06 2010. 09 11 AM IST
Updated: Wed, Oct 06 2010. 09 11 AM IST
Mumbai: Energy company Reliance Industries and Chesapeake Energy Inc have ended talks over the sale of a stake in the US company’s position in the Eagle Ford shale in south Texas, a sources familiar with the matter said late Tuesday.
Chesapeake has been looking for a partner for its 600,000 acre position in the Eagle Ford. It said in May that it intended to close the deal by the end of the third quarter, but has since pushed the deadline back slightly.
Industry sources said there is still strong interest for shale assets, and Chesapeake is likely to find another partner soon.
Companies from around the globe are increasingly investing in US shale plays - underground rock formations that hold reserves of oil and natural gas.
Shale gas accounts for 15 % to 20 % of US gas production but is expected to quadruple in coming years, touching off a scramble among producers large and small for access to resources.
Statoil, Exxon Mobil, Mitsui & Co and Royal Dutch Shell have all bought in to US shale plays in recent years.
The Eagle Ford shale is seen as an especially attractive prospect as it is believed to be rich in natural gas liquids and condensates, which command higher prices than regular natural gas.
Reuters reported last month that the two companies were in talks over the Eagle Ford position, citing a source with direct knowledge of the matter.
Reliance, controlled by billionaire Mukesh Ambani, has struck three shale gas joint ventures with US firms this year.
Ambani, the world’s fourth richest man according to Forbes magazine, has made no secret of Reliance’s overseas ambitions, and is looking to invest in new areas such as shale gas to expand the firm’s businesses beyond petrochemicals, refining, oil and natural gas exploration, and retail.
Chesapeake and Reliance declined to comment.
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First Published: Wed, Oct 06 2010. 09 11 AM IST