Australian oil firm AWE has sold down its interests in the Bass basin offshore northern Tasmania for $74 million in cash to the Indian Prize Petroleum, the upstream arm of state-run refiner Hindustan Petroleum (HPCL).
The shallow water fields are located in the Bass basin between mainland Australia and Tasmania. Origin Energy is the operator of the fields where AWE and Toyota Tsusho are major partners.
Prize Petroleum will acquire 11.25% stake in T/L1 license, which includes the Yolla producing field, and purchase a 9.75% stake in T/18P permit, including Trefoil development field in Australia.
Prize Petroleum is a wholly owned upstream subsidiary of the major Indian refining and retail combine Hindustan Petroleum Corp. Ltd., which is headquartered in Mumbai.
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Prize Petroleum will also have a stake in gas infrastructure including an offshore platform, gas processing plant and a 147 km subsea pipeline.
The company will receive $70.1 million upon completion of the sale with a further $4.38 million deferred payment payable upon meeting the following conditions: $2.19 million on completion of the BassGas Mid Life Enhancement (MLE) project what includes drilling of two development wells and installation of gas compression and $2.19 million if the MLE project costs do not exceed an agreed threshold.
AWE says the sale will release capital from the BassGas asset and strengthen the company's financial position as well as reduce its exposure to capital commitments for the final stages of the MLE work.
"Our remaining 35 percent interest in BassGass is an appropriate holding in this non-operated asset and maintains our voting rights at a level that provides control over major investment decisions," he said.
The deal is subject of government approval, including from the Australian Foreign Investment Review Board and Reserve Bank of India.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com More