Reliance Industries Limited (RIL) and British Petroleum (BP) earlier this week announced a partnership to accelerate creation of infrastructure to receive, transport and marketing of natural gas in India. Under the joint venture, BP will get a 30% stake in 23 oil and gas blocks belonging to Reliance in India.
As part of the deal, BP will pay RIL an aggregate consideration of USD 7.2 billion, and completion adjustments, for the interests to be acquired in the 23 production sharing contracts. Future performance payments of up to USD 1.8 billion could be paid based on exploration success that results in development of commercial discoveries. These payments and combined investment may amount to USD 20 billion. Speaking exclusively to CNBC-TV18, Sashi K Mukundan, Country Head of BP said that it will seek government approval for the deal with RIL later this week. "We are already in advanced stages of putting the papers together and have informed the PMO and the Oil Ministry about the deal with RIL last week," Mukundan said. Mukundan said the company will be represented in the management committee for its 30% stake. "There will be an overarching technical committee with equal rights," he said. Explaining the contours of the way forward for the deal, he said RIL and BP will need to build LNG terminals. He said it is too early to say if the new LNG terminal will be in Jamnagar or Kakinada. Mukundan said the new JV will be incorporated in three to six months, adding that at some point in the future the JV would want to explore entering the downstream business via refining. Mukundan said that Canada's Niko Resources has not communicated about hiking its stake in the KG-D6 block. Sashi K Mukundan, Head of BP India, in an interview with CNBC-TV18Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
