Reliance Industries on Monday announced that sale of 30 per cent stake in its 23 blocks including the giant KG—D6 gas fields to UK’s BP Plc for $ 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 $ 7.2 billion and future performance payments of up to $ 1.8 billion.

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

“The partnership will combine BP’s world—class deepwater exploration and development capabilities with Reliance’s project management and operations expertise,” the statements said.

Oil Secretary, Mr S Sundareshan, said the farm-out of stake in the blocks awarded under New Exploration Licensing Policy (NELP) transaction will need government approval.

However the nature of the approval will be different from Vedanta Resources’ $ 9.6 billion acquisition of Cairn India as the Reliance—BP deal is a farm—out agreement and not a transfer of control.

Reliance will retain operatorship of all the 23 blocks.

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