BP picks up 30 per cent stake in Reliance's oil and gas blocks for $7.2 bn
21 February 2011
Reliance Industries Ltd and BP Plc today announced a strategic partnership under which the British oil major will pay RIL $7.2 billion for a 30-per cent stake in 23 oil and gas blocks Reliance operates in India, including the prolific KG D6 gas block.
BP will pay Reliance an aggregate of $7.2 billion, including completion adjustments, for the interests to be acquired in the 23 production contracts. BP will pay an additional $1.8 billion in future performance payments based on the exploration success that results in development of commercial discoveries.
These payments and combined investments could amount to $20 billion.
The deal marks an expansion of operations for the British giant in Asia's third-biggest economy as it expects energy consumption in India to grow by more than 4 per cent a year for the next two decades, with demand for gas rising more than 5 per cent.
''India is one of the fastest-growing economies in the world,'' BP chief executive officer Robert Dudley said in a statement. ''By allying ourselves with Reliance, we will access the most prolific gas basin in India and secure a place in the fast-growing Indian gas markets.''
It may be noted BP last year sold its assets in neighbouring Pakistan as part of $22-billion in disposals worldwide to help pay for the Gulf of Mexico oil spill.