London: Reliance Industries Limited (RIL) and BP on February 21 announced a partnership between the two companies. Under the partnership BP will take a 30 percent stake in 23 oil and gas blocks belonging to RIL in India. The deal was signed in London by RIL chairman and managing director Mukesh Ambani and BP Group chief executive Robert Dudley.
The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.
BP will pay RIL Limited an aggregate consideration of $7.2 billion, and completion adjustments, for the interests to be acquired in the 23 production sharing contracts. Future performance payments of up to $1.8 billion could be paid based on exploration success that results in development of commercial discoveries. These payments and combined investment could amount to $20 billion.
The 23 oil and gas blocks together cover approximately 270,000 square kilometers. This will make the partnership India’s largest private sector holder of exploration acreage.
BP has been working with RIL since December 2008 on the D-17 deep-water block in the Krishna-Godavari (KG) basin on the east coast of India. BP, with a 50 percent interest, operates the block and Reliance holds the remaining interest.
However, Oil Secretary S. Sundareshan said that the RIL-BP deal will need the government’s approval as New Exploration and Licensing Policy blocks are involved.