Mukesh Ambani's RIL signs $9 billion deal with BP

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Mukesh Ambani led Reliance Industries Limited (RIL) has signed a joint venture agreement with oil major British Petroleum (BP) for 30 per cent stake in Reliance Industries' 23 oil and gas blocks including the KG-D6 gas fields. The deal, valued at $9 billion, is one of the biggest foreign direct investments in the country.

According to the agreement, BP will get 30 per cent of RIL's upstream assets in 23 oil and gas blocks (including the producing KG D6 block) for $9 billion. The two companies will also form a 50:50 joint venture for the sourcing and marketing of gas in India. (Read full press statement)
"BP will pay Reliance Industries Limited an aggregate consideration of US$7.2 billion, and completion adjustments, for the interests to be acquired in the 23 production sharing contracts. Future performance payments of up to US$1.8 billion could be paid based on exploration success that results in development of commercial discoveries. These payments and combined investment could amount to US$20 billion," RIL said in a statement.

"The partnership will combine BP's world-class deepwater exploration and development capabilities with Reliance's project management and operations expertise," the company added.

The 23 oil and gas blocks together cover approximately 270,000 square kilometres. This will make the partnership India's largest private sector holder of exploration acreage.

The deal is seen as a positive for the company. Ambareesh Baliga of Karvy Stock Broking said the rumour (on the deal) was in the market since the morning. This will play up tomorrow as it is extremely positive news. RIL has been an underperformer for the last 2 years and its time the patient investors bear some fruit. RIL rose 2.22 per cent on the NSE today though the deal was announced after market hours.

Commenting on the deal former chairman of ONGC RS Sharma said, “This is positive news for the entire E&P (exploration and production) sector for India. The deal covers the entire value chain - upstream and downstream." Referring to the Cairn-Vedanta deal that has failed to take off, Sharma said "the sentiments have been negatively impacted because of one deal...this deal shows confidence in the Indian oil sector."

RIL's Chairman Mukesh Ambani said: "We are delighted to partner with BP, one of the largest energy majors and one of the finest deep water exploration companies in the world. This partnership combines the skills of both companies and will be focused on finding more hydrocarbons in the deep water blocks of India and significantly contribute to India's energy security."

"This partnership meets BP's strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets," said Mr. Carl-Henric Svanberg, Chairman of BP.



Read more at: [url=http://profit.ndtv.com/news/show/mukesh-ambani-s-ril-signs-9-billion-deal-with-bp-141776?cp]http://profit.ndtv.com/news/show/mukesh-ambani-s-ril-signs-9-billion-deal-with-bp-141776?cp[/url]

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[chotu gadu]

BP ne oka sinkin ship, daanitho deal ante ekkado theda kodthundi...