Reliance, BP create firm to source, market gas

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India's Reliance Industries and British giant BP on Friday announced the creation of an equal joint venture firm to source and market natural gas in India, according to a statement.

The move marks the next step in the $7.2 billion deal that Reliance and BP completed recently, through which the British giant acquired a 30 percent stake in 21 of Reliance's oil and gas fields off India's coast.

The firm, called India Gas Solutions, will also develop infrastructure to accelerate transportation and marketing of natural gas within the country.

"The need for assured gas supplies to fuel India's growing gas demand is crucial and the Reliance-BP partnership is in a position to contribute towards this," Sashi Mukundan, BP India chief, said in a statement.

India Gas Solutions will comprise a six-member board, with equal representation from Reliance and BP.

Equity for the firm would be based on equal contributions, the statement said, without disclosing details.

The company starts operations with 30 employees transferred from BP and Reliance.

Reliance, controlled by India's richest man Mukesh Ambani, in October said it had suspended drilling at its oil and gas exploration blocks covered under the BP deal.

A re-evaluation of its exploration and production strategy is taking place, in partnership with BP, but current oil and gas production remains unaffected.

© 2011 AFP

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