British oil explorer BP Plc's proposed $7.2-billion deal to buy stakes in 23 oil and gas blocks in India operated by Reliance Industries Ltd may get cabinet approval next week when it meets to consider the matter, according to reports.
The oil ministry has recommended that the deal go through and referred it to the cabinet because of the large investment involved, officials anonymously told sections of the media in New Delhi yesterday.
The petroleum and natural gas ministry is in favour of BP's proposal, paving the way for approval of the landmark deal that marks the first significant investment by an international oil company in India (See: BP picks up 30 per cent stake in Reliance's oil and gas blocks for $7.2 bn).
"Petroleum minister Jaipal Reddy has recommended the approval of the investment. He signed it last night and sent it this morning. In all probability, it is coming up next Thursday before the Cabinet Committee for Economic Affairs," an official told the paper. The proposal has been sent to the ministries of law, finance and home, the report adds.
BP wants to tap the demand, which far exceeds supply, in Asia's second-biggest energy- consuming nation. It announced the partnership with Reliance Industries on 21 February.
BP plans to acquire a 30-per cent stake in each of the Reliance blocks, including KG-D6 in the Krishna-Godavari basin off the Andhra Pradesh coast, the nation's biggest gas deposit - where RIL is under a cloud for falling output, which it blames on technical difficulties.
Mukesh Ambani-controlled RIL is seeking BP's technology and expertise to increase output from the field, which has dropped to about 50 million cu m a day from a peak rate of 60 million in June last year.