2000yr old Thirukural

Monday, February 21, 2011

Reliance $9 billion deal with BP








Reliance Industries Limited (RIL) and BP on Monday announced a partnership between the two companies. Under the partnership BP will take a 30 per cent 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 partnership across the full value chain comprises BP taking a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG D6 block, and the formation of a 50:50 joint venture between the two companies for the sourcing and marketing of gas in India.
BP signs $ 9 billion deal with Reliance
The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.
"We are delighted to partner with BP, one of the largest energy majors and one of the finest deep water exploration companies in the world. This partnership combines the skills of both companies and will be focused on finding more hydrocarbons in the deep water blocks of India and significantly contribute to India's energy security," said Mukesh Ambani.
BP hoped to leverage RIL's strong position in the Indian market.
"This partnership meets BP's strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets," said Carl-Henric Svanberg, Chairman of BP.
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 kilometres. 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 deepwater block in the Krishna Godavari (KG) basin on the east coast of India. BP, with a 50 per cent 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.

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