Will analysts re-rate RIL stock post BP deal?

In the largest foreign direct investments, British oil major BP has bought a 30% stake in 23 oil and gas blocks of Reliance Industries for USD 7.2 billion.

While the government is currently examining RIL-BP deal, Oil secretary S Sundareshan says that the deal needs government nod as NELP blocks are involved. "These are all NELP blocks. Participating interest, if it is to be transferred to a third party, has to be with the permission of the government. As and when they apply to us, we will examine it on merits and come to a decision." The RIL stock has been underperforming for quite some time now largely on account of lower production and consequently lesser profitability coming in. But the BP deal may act as a game changer for the Indian oil and gas producer. Calling the deal "a balancing mechanism adopted by the company in order to not to have huge capex pressure on account of this oil and gas drilling blocks", SP Tulsian of sptulsian.com says it is a positive. "This 30% stake translates into a total value of USD 24 billion. If we go by the USD 7.2 billion that will give them the total capex which will be required by the company for exploring these blocks and even going forward they have a huge capex lined up at Kaveri Basin also which may go on stream in the next four to five years. Also, probably this 50:50 partnership in marketing can give them better realization (which currently stands at USD 4.2 per mmbtu)." With BP kind of a partner coming in and with a 50:50 JV being formed, KGD6 output which was nowhere close to increase, will get some amount of greater thrust. Also BP