RIL – BP deal gets government approval

Reliance Industries today said it had received government approval for selling a 30-per cent stake in 21 oil and gas blocks including the in-production KG D6 block to British oil explorer BP Plc for $7.2 billion.

''BP will take a 30-per cent stake in 21 oil and gas production sharing contracts (PSCs) that RIL operates in India, including the producing KG-D6 block. Following the approval, RIL and BP will work together to conclude the deal expeditiously,'' the statement added.

Although the ministry had cleared the transaction on 22 July, the companies had to wait for the government's approval in writing to proceed with the deal as the oil ministry had referred it to the cabinet committee on economic affairs.

BP will pay in three tranches $7.2 billion to RIL during FY'12.

BP will now have to provide a bank guarantee and performance guarantee, as per the production sharing contract.

RIL currently operators 23 blocks, 19 of which are off the east coast, while two are in Assam and Gujarat. The NEC-25 block off the Orissa coast is RIL's second biggest discovery block after KG-D6.