Hardy's sale of Indian assets-I: Elango outfoxed
Jul 18:
HOEC's managing director Pandarinathan Elango won and then lost the deal to take over Hardy Oil & Gas Ltd's assets in India.
8He has been outfoxed by two other Indian professional entrepreneurs with little hands-on oil & gas experience in India
8The Indian E&P landscape is beginning to change it seems, with the advent of an altogether different breed of players
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Even as Elango was calculating a huge windfall out of Hardy Oil & Gas Ltd's distress sale of stakes in three assets to the company, Hardy received a competitive offer from the little known Chennai-based Invenire Energy to take over the assets at $3 million. Elango had offered just $1.5 million And Hardy has decided to take the offer.
With a $3 million investment, Invenire has inherited the the crucial CY-OS/2 block, where Hardy got a favorable $28.6m asettlement award in an arbitration court in Kuala Lumpur against an Indian government ruling to take the block away from Hardy because of the failure to declare commerciality within the PSC deadline.
The ruling was given in February 2, 2013 and Hardy had since then been trying to get the award implemented through the Indian judicial system, in face of opposition from the Indian govenrment, but without success.
Fed up with the litigation, Hardy has decided to sell its interest in the block to HOEC, as also its interests in all three blocks, PY-3 (18%), CY-OS/2 (75%) and GS-01 (10%)
In PY-3 too, there is a DGH order that allows ONGC to take over the field, as there is a clause that allows ONGC to take over a JV field after 10 years of production. This follows, DGH's stalling of an application by Hardy for a renewal of the PSC which expires in December 29, 2019. The revised FDP for the field has also been stalled by the DGH that could have revived the production from the PD-3S field which stopped flowing some five years ago after a deal by Hardy to hire a Floating Production Unit from Aban offshore was nixed by the DGH.
As for GS-01, RIL is a 90% shareholder who does not want to go ahead with the development, but taking over RIL's 90% stake seems to have become another hurdle.
Hardy's office is located in Chennai and so is the office of Invenire. It is likely that the staff in the two office spoke to each other, where upon Invenire did some more due diligence, and eventually, that was what prompted Invenire to come up with a better offer than Elango.
Invenire was founded in 2016, and it hit the headlines when it acquired Tata Petrodyne Ltd (TPL) in a $100 million deal. Miami-based Atyant Capital holds a majority stake (two-thirds) in Invenire, incorporated in 2016. TPL has interests in four blocks in India and four abroad, including in Tanzania and Indonesia. A source said that one of the reasons why Invenire was keen on TPL was its presence in Southeast Asia.
It is learned that Invenire has $500 milliom equity to build a sustainable and profitable portfolio in the sector. The advantage with them is that the PE players are full-cycle investors. The company’s aim is to increase the production of the existing blocks (TPL) to around 4000 barrels of oil per day to 20,000 boepd by 2021