Reliance Industries Ltd., one of the largest companies in India, and Apollo Global Management LLC, a New York-based private equity firm, are looking to buy El Paso Corporation’s (NYSE: EP) oil and gas exploration and production business unit. As ranked by assets, El Paso is the 11th largest US oil and gas producer, according to the OGJ150 Quarterly Report.
Bloomberg News is reporting that Kinder Morgan Inc. (NYSE: KMI), which acquired El Paso in October, is considering selling the company’s E&P group in pieces. The total value of the unit is estimated at about $8.1 billion.
Funds from the possible sale could help Kinder Morgan finance its $21 billion purchase of El Paso. Kinder Morgan, which is mainly a midstream business, reportedly intends to retain El Paso’s extensive pipeline assets but wants to spin off or sell the company’s upstream business.
El Paso’s E&P unit has extensive assets in the Eagle Ford Shale in South Texas, Haynesville Shale in Northwest Louisiana, and in the Permian Basin of West Texas.
Final closing of the Kinder Morgan acquisition of El Paso is expected to close by the end of the second quarter of 2012.
El Paso Corporation and Kinder Morgan are both based in Houston.
