MUMBAI, Feb. 22 (UPI) -- Oil giant BP will pay $7.2 billion for a 30 percent stake in 23 oil and gas blocks controlled by Reliance Industries Ltd. in India, BP announced.
The 23 oil and gas blocks together cover approximately 104,248 square miles, making the partnership India's largest private sector holder of exploration acreage. The blocks lie in depths ranging from 1,312 feet to more than 9,843 feet.
Only one of the blocks, Krishna Godavari D6, is in production, with an output of 1.8 billion cubic feet of natural gas per day, accounting for 40 percent of Indian gas output.
Under the deal, Reliance, India's largest company by market capitalization, will continue as operator under production sharing contracts. The deal also provides for a 50-50 joint venture for the sourcing and marketing of gas in India.
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The agreement follows BP's $16 billion share swap with Russian state oil company Rosneft last month.
"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," said Reliance Industries Chairman Mukesh Ambani, in a statement. "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."
BP, in its Energy Outlook 2030 forecast of global energy released last month, said energy consumption in India had grown 190 percent over the past 20 years and is likely to grow 115 percent in the next 20 years. Demand for gas, India's fastest growing fossil fuel, is expected to grow at a rate of nearly 5 percent a year from 2010-30, the BP analysis shows.
"India is one of the fastest growing economies in the world. By allying ourselves with RIL (Reliance), we will access the most prolific gas basin in India and secure a place in the fast growing Indian gas markets, creating a genuinely distinctive BP position,'' said BP Group Chief Executive Officer Robert Dudley in a statement.
Reliance said it had been in discussions with BP since late 2007.
In 2005, BP had proposed to partner with Oil and Natural Gas Corp, India's largest state-owned oil company, in three of its deep-sea blocks off the east and west coasts of India, Press Trust of India reports. That bid was rejected by India's oil ministry, sources said, because the petroleum exploration license for the blocks was set to end during the next two years.
BP also announced Monday that it was temporarily halting operations in Libya because of rising violence.
