The Cabinet Committee on Economic Affairs (CCEA) has approved the July 22 sale of the stake of RIL in BP in 21 blocks, including the centerpiece of the east coast of KG-D6 gas production area and the discovery of the region of NEC-25. However, slowed the same for both blocks is not important - one from each region of the deep sea off the coast of Orissa and the other a block in Assam onland - on technical issues.
"RIL has been approved by the Indian government for its transformational agreement with BP," the company said in a statement. "RIL is grateful to the Indian government for approval, which will result in the largest foreign investment in the hydrocarbon sector domestic. "
BP will provide a bank guarantee and performance guarantee, as in the Production Sharing Contract.
The deal, which could increase the value of $ 20 million on the basis of payments performance and future investments, Reliance will provide access to the experience of BP's deepwater drilling and accelerate the development and production of your fields, performance especially under D6 block KG-East.
BP, which is struggling to recover from a devastating oil spill disaster in the Gulf of Mexico last year, the transaction is the opportunity to enter the market, where demand for energy is growing by 5-8%.
"BP will acquire a 30% interest in 21 oil and gas production contracts Sharing (PSC), which operates in India RIL, including the production of KG-D6 block. After approval RIL and BP are working together to complete the transaction quickly, "the statement added.
RIL, the most valuable company in India, on February 21 had agreed to sell a stake of 30% in 23 of its 29 oil and gas blocks of the London-based BP for $ 7.2 billion and you can get an additional $ 1.8 billion if the two explorers find more oil.
Approval of the sale of shares in 21 blocks, the CCEA also delegated to the Ministry of Petroleum to "dispose of the other two later on merit.
RIL can be used for deep-water expertise to address technical problems BP KG-D6 block.
Dhirubhai gas fields, 1 and 3 in KG D6 block production was down to 38.4 million cubic meters per day of 53 MMSCMD in March last year. Reliance was forced to restrict oil production in the field of AD in the same area by 14,500 barrels per day due to high water cut and gas.
With 7.6 MMSCMD gas field MA, KG-D6 block of product 46 MMSCMD in the week ending July 31, against 61.5 msmcmd March last year. As the projections should production increased to about 70 MMSCMD now.
The approval of the sale of 30% stake in deepwater block NEC-DWN-2002 / 1 in the Bay of Bengal and Assam onland block AS-ONN-2000 / 1 it was later decided that the oil regulator DGH RIL and were disagree on the status of exploration in both areas, the sources said.
RIL had applied for February 25 Government nod for share sales. Exploring new licensing policy has allowed the sale or transfer of a holding (farm-out), which is duly approved by the Ministry of Petroleum.
However, the ministry, although competent to approve the deal, decided to return to the CCEA.
Moreover, it deals with questions on the tank KG-D6, BP, RIL should contribute quickly to the production of nine gas discoveries satellite, with a company Mukesh Ambani is difficult to assemble a viable development plan.
Europe second oil company will pay $ 7.2 billion to RIL in three installments during FY12.
RIL is the operator of all the blocks 23, while the Canadian company Niko Resources Hardy Oil and the United Kingdom has a 10% minority interest in a pair. After the agreement, the share of RIL in the blocks down to 60-70%. 19 of 23 blocks located on the east coast, and two blocks in Assam and Gujarat.
Niko has a 10% stake in KG-D6 block and BP after the transaction, the share of RIL would be reduced to 60%.