LONDON, Aug. 31 (UPI) -- BP said it landed a deal with India's Reliance Industries Ltd. that gives it access to 40 percent of the natural gas production in the country.
BP acquired a 30-percent stake in 21 oil and gas production sharing contracts held by RIL in India. Both companies under the terms of the deal also formed a joint venture for marketing gas in India.
"The alliance with BP will boost our efforts to realize the true potential of India's hydrocarbon reserves," Mukesh Ambani, chairman and managing director at RIL, said in a statement.
BP pays $7.2 billion for the production sharing contracts and agrees to further potential performance payments of up to $1.8 billion. The 21 oil and gas blocks under the deal include the KG D6 offshore block that produces around 1.6 billion cubic feet of gas per day, which represents 40 percent of India's natural gas production. RIL stays on at the operator.
"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," Bob Dudley, BP's chief executive, said in a statement.
The deal follows a joint venture between Exxon Mobil and Russian energy company Rosneft dealing with oil and gas exploration, including activity in the arctic. Rosneft and BP were in early negotiations for a similar deal, though executives at its Russian venture TNK-BP complained it would've violated the terms of the shareholder agreement.
