India gives nod to BP-Reliance deal

22nd July 2011, Comments 0 comments

India has cleared a $7.2-billion deal for Reliance Industries Ltd. to sell a major stake in two dozen of its oil and gas blocks to Britain's BP, Petroleum Minister Jaipal Reddy said Friday

"We have approved the deal between RIL and BP today," Reddy told reporters after a cabinet meeting in New Delhi.

Under the agreement, announced in February, BP will buy a 30 percent stake in 23 of Reliance's oil and gas blocks, including India's largest gas field KG-D6, for $7.2 billion.

The oil ministry had already given its support to the deal, one of the largest foreign investments in India.

Reliance is pinning hopes on the deepwater drilling skills of the British oil and gas major to help boost output, while BP will benefit from access to new hydrocarbon resources and markets.

Such access has become especially important for BP given the political upheaval in the oil-rich Middle East and north Africa, and a moratorium imposed by Washington on drilling in the Gulf of Mexico in the wake of last year's massive oil spill.

Late last month, India's government gave long-awaited clearance to the multi-billion-dollar sale of British oil explorer Cairn Energy's Indian oilfields to London-listed mining group Vedanta Resources.

That approval, nearly a year after the sale was initially announced, came with the key rider that Cairn India's new owner must share the oilfields' royalty burden, currently borne in full by India's state-owned Oil and Natural Gas Corp.

© 2011 AFP

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