November 16, 2010 / 12:43 PM / 9 years ago

Apache Corp to get stake in Australia block-sources

NEW DELHI, Nov 16 (Reuters) - U.S.-based Apache Corp (APA.N) is set to get 40 percent of Australian exploration block WA 388P as the current partners hand over part of their stakes to reduce drilling costs, three Indian industry sources said on Tuesday.

India’s Bharat Petroleum (BPCL.BO), Hindustan Petroleum (HPCL.BO), Videocon Industries (VEDI.BO), Gujarat State Petroleum Corp (GSPC) and Australia’s Oilex (OEX.AX), which operates the block, currently own 14 percent each.

South Africa’s Sasol (SOLJ.J) has the remaining 30 percent interest in the block.

Two Indian industry sources said that the five partners who each have 14 percent had agreed to reduce their stakes to 8.4 percent while Sasol was willing to cut its stake to 18 percent.

“Initially Apache was asking for 60 percent but now we are willing to give a total of 40 percent along with operatorship,” one of the two sources said on condition of anonymity. He also said the farm out deal is expected to be completed by end-November.

The second source also confirmed that Apache will have a 40 percent stake in the block along with operatorship.

A third industry source said that state-run BPCL had recently won board approval to reduce its stake in the block to 6.5 percent. “They have taken approval for a higher percentage (reduction) than what is required,” he said.

All the three India-based sources said that Apache was willing to bear the entire cost of drilling the first well and would use its own drilling rig.

They said the move was aimed at reducing the drilling risk of the consortium partners.

BPCL said it had no comment. None of the other three Indian companies was available for comment.

Apache is one of Australia’s most active offshore explorers, according to its website, and produces over 30 percent of Western Australia state’s local gas supplies.

Reporting by Nidhi Verma

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