Wednesday, August 31, 2011

Reliance Industries, BP complete $7.2-billion deal

NEW DELHI,(31/08/11)(Tehelkanews)

Reliance Industries and BP have completed the $7.2-billion deal in which the British company will pick up 30% in 21 blocks, including D-6, where technical expertise of the oil major is expected to reverse the decline in output from India\'s biggest gas field.BP, the first global oil major to make a significant investment in India, will form a 50:50 joint venture with Reliance Industries for sourcing and marketing of gas in India which will also accelerate the development of infrastructure in the sector.

Technical experts from both companies are expected to quickly work out ways to address the problems at the D-6 block in the Bay of Bengal. Reliance\'s gas output has dipped below 50 million metric standard cubic metres a day instead of rising to 80 mmscmd as the deep-sea reservoir turned out to be structurally different from what was imagined during surveys.\"The alliance with BP will boost our efforts to realise the true potential of India\'s hydrocarbon reserves,\" Reliance Chairman and Managing Director Mukesh Ambani said in a statement. He said the deal would also help boost energy security of the country, which depends heavily on imports to fuel its expanding economy.

For BP, the $7.2-billion investment is part of its global strategy to expand in growing markets with the help of local partners. \"This is the beginning of what we expect to be a long and successful working partnership with Reliance, building on the strengths of each company,\" said Bob Dudley , BP group CEO.\"This major investment is directly aligned with our strategy of creating long-term value by forming alliances with strong national partners, gaining material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets.\" In addition to the $7.2 billion initial investment, BP may pay another $1.8 billion to Reliance depending on commercial discoveries in the exploration blocks in which it is buying stake.
News From: http://www.7StarNews.com

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