BP PLC has completed its acquisition of a 30% interest in 21 oil and gas production sharing contracts operated by Reliance Industries Ltd. off India.
BP will pay RIL $7.2 billion subject to completion adjustments for the acquisition, approved by the Indian government in July (OGJ Online, July 22, 2011). Performance payments of a further $1.8 billion are contingent on exploration success and development of discoveries.
BP and RIL will form a 50-50 joint venture for sourcing and marketing of gas in India and to speed development of logistical systems.
Blocks covered by the deal cover 220,000 sq km and lie in 400-3,000 m and more of water.
Included is the deepwater KG-D6 block off eastern India, where RIL is developing a world-class gas discovery but has come under pressure from the government to drill more wells because of production shortfalls against rates specified in work plans (OGJ Online, Aug. 4, 2011). Production from the block now is about 1.7 bcfd.
RIL remains operator of all the blocks.
The acquisition by BP of interests in two other RIL blocks remains under discussion between RIL and the government.