Mukesh Ambani led Reliance Industries Limited (RIL) has signed a 50:50 joint venture agreement with oil major British Petroleum (BP) for sourcing and marketing of gas in India. The joint venture agreement, 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.
BP will pay RIL an aggregate consideration of US$7.2 billion 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.
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.
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