Mumbai, Aug. 20: Public sector oil firm Bharat Petroleum Corporation Ltd (BPCL) has entered the shale gas business by purchasing a stake in two exploration blocks in Australia.

The company has executed a letter of intent with Norwest Energy of Australia for purchasing stakes in two blocks in Perth Basin.

Norwest currently owns 100 per cent and 55 per cent interest in the two blocks, half of which will be picked up by BPCL through its wholly owned subsidiary Bharat Petro Resources Limited (BPRL).

The subsidiary will be investing $13.5 million for funding its share of exploration and drilling expenses.

The move will give it a competitive advantage when shale gas acreage is offered for bidding in India, the company said in a statement. The past three months have seen Reliance Industries acquire three large properties in the US that have shale gas potential.

BPRL is a subsidiary of Bharat Petroleum, set up to create a footprint in the oil and gas exploration business. The company has so far acquired stakes in 28 blocks, 19 of them outside India.

In most of these blocks, BPRL is a minority partner and some other firm is the operator. So far, BPRL has seen two notable successes — one in Brazil and the other in Mozambique, both in offshore blocks. The Brazil block, where BPRL has a 12.5 per cent stake, is estimated to hold a total of 400 million barrels of oil.