Varun Industries, a Bombay Stock Exchange listed mining, steel and oil and gas conglomerate, said that it would sell 51% stake in its onshore oil block at Madagascar to Da Qing Oilfield (Petro China subsidiary), a China based oil company for USD 150 million (INR 790 crore).

Varun Industries has formed a special purpose vehicle Sure King Varun Hong Kong with Da Qing Oil Field, one of the leading oil companies in China. Varun Industries would hold 49% in the SPV while Da Qing would hold majority stake.

The statement added that Varun has signed a joint venture cooperation agreement with the Chinese firm for the stake sale.

The statement added that "Da Qing group has committed to pay USD 150 million as upfront money towards consideration to Varun Group for ceding 51% stake in the oil block.”

Mr Kiran Mehta CMD of Varun Industries Ltd said that "This (entering a JV) is one of the major steps towards unlocking the value of our varied assets in Madagascar.”

The company said that the Madagascar block has an area of about 6,884 sq km.

(Sourced from HT)