Reuters | Sep 17, 2010 | 9:02am IST
Energy major Reliance Industries is in talks with U.S.-based Chesapeake Energy to buy a stake in Eagle Ford shale gas project, a source with direct knowledge of the matter said on Friday. Financial terms of the deal have not yet been finalised and Reliance may form a joint venture with Chesapeake to develop the asset, said the source, who declined to be named. Reliance Industries declined to comment.
On Thursday, Chesapeake CEO had said the company expects to strike a joint venture deal for the Eagle Ford acreage in the next 30 days, but did not name a partner. A U.S. brokerage firm said last month that Reliance is a likely partner for Chesapeake Energy’s Eagle Ford shale acreage. Reliance, controlled by billionaire Mukesh Ambani, has struck three shale gas joint ventures with U.S. firms this year. The company has received about 20 to 25 pitches from investment bankers for shale assets, Chief Financial Officer Alok Agarwal has said.
Shale gas accounts for between 15 percent and 20 percent of U.S. gas production, but is expected to quadruple in coming years, touching off a scramble among producers large and small for access to resources. 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.