Reliance exits US shale gas space
Agrees to sell its holding in EagleFord shale gas assets
image for illustrative purpose
New Delhi: Reliance Industries Ltd (RIL) has exited the last of its shale gas assets in the US after it agreed to sell its holding in EagleFord shale gas assets for an undisclosed sum of money.
Reliance had between 2010 and 2013 bought stakes in three upstream exploration joint ventures with Chevron, Pioneer Natural Resource, and Carrizo Oil and Gas, and a midstream joint venture with Pioneer. Midstream refers to the processing, storing, transporting and marketing of hydrocarbons.
"Reliance Eagleford Upstream Holding, LP, a wholly-owned step-down subsidiary of RIL, announced the signing of agreements with Ensign Operating III, LLC, a Delaware limited liability company to divest its interest in certain upstream assets in the Eagleford shale play of Texas, USA," the firm said in a statement.
With this transaction, Reliance has divested all its shale gas assets and has exited from the shale gas business in North America, the statement said.
"A purchase and sale agreement has been signed between REUHLP and Ensign on November 5, 2021, for this sale. The sale is at a consideration higher than the current carrying value of the assets," it said without giving details.
Reliance in 2017 sold the first of its shale gas business, Marcellus shale in northeastern and central Pennsylvania, for $126 million. It had in 2010 bought 60 per cent stake in the asset for $392 million. In June 2015, the company sold its Eagle Ford midstream joint venture with Pioneer Natural Resources in the US for $1 billion. Reliance had spent $46 million in acquiring a 49.9 per cent stake in Eagle Ford and invested a further $208 million. In February this year, it agreed to sell its entire stake in certain upstream assets in the Marcellus shale gas asset in south-western Pennsylvania in the US for $250 million. Reliance was till 2014 bullish on the shale gas but a drop in crude oil prices since late-2014 hit valuations. Shale gas blocks have suffered far more than conventional oil and gas blocks as they are economically viable only when prices are above a certain threshold.
