BP in US$7.2 billion Indian gas deal
BP (LON:BP.) has teamed up with Indian energy and materials group Reliance Industries Limited in a deal that will see BP paying US$7.2 billion for a 30 per cent stake in 21 oil and gas production sharing contracts that Reliance operates in India.
The move is part of a planned alliance between BP and the Mumbai-based firm that the two companies expect to lead to cooperation throughout the "gas value chain" in India, from exploration and production to distribution and marketing. The completion of the deal also represents one of the largest ever foreign direct investments into India.
As part of the alliance, the two companies are also forming a 50:50 joint venture for the sourcing and marketing of gas in India. This JV is aimed at accelerating the creation of infrastructure for receiving, transporting and marketing natural gas.
"This is the beginning of what we expect to be a long and successful working partnership with Reliance, building on the strengths of each company," said Bob Dudley, BP's group chief executive. "This major investment is directly aligned with our strategy of creating long-term value by forming alliances with strong national partners, gaining material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets."
BP's share price was up 2.9 per cent at 397.5 pence by 12:42pm today.
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