Government approves $7.2 billion RIL stake sale to BP

The Cabinet Committee on Economic Affairs (CCEA) has approved the $7.2-billion sale of part stake in 23 oil and gas blocks of Reliance Industries to BP.

RIL had, in February, agreed to sell a 30-per cent stake in 23 of its oil and gas blocks, including some of the Krishna Godavari (KG) basin blocks, to UK-based global oil major BP for around $7.2 billion.

The ministry of petroleum and natural gas had earlier recommended approval for the deal, which would give RIL access to BP's expertise in deepwater oil and gas exploration.

The CCEA approval, however, covers only 21 blocks as the exploration status in the two remaining blocks are in dispute.

"The Cabinet Committee on Economic Affairs today approved the proposal to grant consent to the transfer of 30 per cent of participating interest of Reliance India Limited to BP Exploration (Alpha) Limited in 21 blocks, by excluding blocks AS-ONN-2000/1 and NEC-DWN-2002/1, subject to submission of all guarantees and documents by the assignee viz, BP Exploration (Alpha) Limited in terms of provisions of the respective PSCs," an official release said today.

BP will have to furnish a bank guarantee and performance guarantee as prescribed under the production-sharing contract with RIL.