Current Affairs-Trade and Commerce

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BP-Reliance in $ 7.2 Billion Oil-Gas Alliance

In one of the country’s biggest energy deals, Reliance Industries today announced sale of 30 per cent stake in its 23 blocks including the giant KG-D6 gas fields to UK’s BP Plc for USD 7.2 billion.

Besides the stake transfer, Reliance and BP will form a 50:50 joint venture for the sourcing and marketing of gas, the companies said in identical statements today.

Reliance has a portfolio of 29 exploration blocks besides the 30 per cent interest it holds in the Panna/Mukta and Tapti oil and gas fields off the west cost.

Of the 29 exploration blocks it has, Reliance is farming-out 30 per cent interest in 23 of them including the producing KG-D6 block which is estimated to hold an inplace reserve of 40 Trillion cubic feet (tcf).

BP will pay Reliance an aggregate consideration of USD 7.2 billion and future performance payments of up to USD 1.8 billion.

The companies said these payments and the combined future investments in the 23 blocks could amount to USD 20 billion in total.