Thaindian News

New Delhi, Aug 9 (IANS) Reliance Industries Ltd (RIL) Tuesday said it had received the government’s approval for a $7.2 billion deal with global energy major BP, which will see the London-based company take a 30 percent stake in 21 oil and gas blocks operated by the Mukesh Ambani-led firm.

The deal, which was originally for a 30 percent stake in 23 oil and gas blocks, held by RIL, was on hold pending approval from various ministries. The government gave its nod to 21 of the blocks, the remaining two were held back on some technical issues.

“Reliance Industries is grateful to the government of India for the approval, which will result in the largest foreign investment in the domestic hydrocarbon sector,” the company said in a statement.

“Following the approval, RIL and BP will work together to conclude the deal expeditiously,” it added.

The deal is worth $7.2 billion and is one of the single largest foreign direct investments in the country.

At the time of signing of the deal, BP had said it could also pay the Mukesh Ambani firm another $1.8 billion, based on successful exploration and that the deal size may increase to $20 billion, depending on future performance payments.

BP has been working with Reliance since December 2008 on the D-17 deepwater block in the Krishna Godavari (KG) basin on the east coast of India. BP, with a 50 percent interest operates the block and Reliance holds the remaining interest.

RIL will hope to utilise BP’s deepwater exploration expertise to ramp up production at the Krishna Godavari basin D6 block, which is one of the largest off shore gas finds in the recent past.

The output from this block has dropped considerably in the recent past.

According to BP’s energy outlook 2030, energy consumption in India has grown by 190 percent over the past 20 years and is likely to grow by 115 percent over the next 20 years, a rate of over 4 percent per annum.