Sun Oil and Natural Gas, a unit of Dilip Shanghvi-owned Sun Petrochemicals Pvt. Ltd, is among companies looking to acquire the Hazira oil and gas field from its owners Gujarat State Petroleum Corp. Ltd (GSPC) and Canada’s Niko Resources Ltd, three people aware of the development said.
GSPC owns 66.67% in the field, while the remaining 33.33% stake is owned by Canada’s Niko Resources Ltd, which operates the field.
A senior executive from one of the companies involved said the parties are close to an agreement on the stake sale.
GSPC is involved in exploration for and production of oil and gas. The government of Gujarat owns 87% of the company’s equity capital.
The Hazira field is part of 16 hydrocarbon producing assets in the Cambay basin in which GSPC holds stakes. In addition to Hazira, GSPC has also signed agreements to sell stakes in some other assets.
“Currently, the daily field production rate is in the range of 1,300-1,400 bopd (barrels of oil per day) for oil with 7-9 mmscfd (million standard cubic feet per day) of gas, out of which GSPC gets its share of 700-800 bopd of oil and 5-6 mmscfd,” GSPC said on its website.
In an emailed response, GSPC said, “Yes; Sun Oil & Gas and various other players have shown interest in acquiring stakes in various onshore fields in which GSPC has participating interest including the Hazira Field. The transaction is at pre-bidding stage; therefore, it is premature to comment on timelines.”
While Niko Resources did not respond to an email sent on Tuesday, a Sun Oil and Natural Gas spokesperson declined to comment.
“We are certainly looking at bidding for and acquiring some of the assets of GSPC including the Hazira field. The bid for the assets closes on 28 November. However, prior to the bidding process, we do not have much detail to share,” an official from Sun Oil and Natural Gas said on condition of anonymity.
“Some of the assets that GSPC has on offer are approaching the end of their field life. One has to closely evaluate their reserve potential and the deserving bid,” said the CEO of an exploration and production company which is also bidding for GSPC’s assets.
This August, Mint reported that GSPC has hired consulting firm EY to re-evaluate onshore exploration and production assets held by the company. GSPC has undertaken a business restructuring exercise to improve its credit profile.
In 2015-16, GSPC incurred a net loss of Rs804.42 crore as it wrote off exploration expenditure. It recorded income from operations of Rs10,607.30 crore on a stand-alone basis, compared with Rs10,946,30 crore the previous year.