Reliance India -BP Bag Egypt Crude Oil Supply For 2013

India’s leading oil and gas player, Reliance Industries Limited (RIL) and BP (Britain’s Oil Major) have successfully bagged the Egypt’s crude oil supply tenders, for 2013. The offer from Egypt’s Ras Gharib Terminal makes RIL the winner of bulk (18 cargos) that renders it around 1.5 million tones of heavy crude. With this order put into effect, BP will receive around 15 cargos in 2013. BP had announced last September about its commencement of work on natural gas production project in Egypt’s Mediterranean basin. Others who have won the contract include Vitol, Dynacom and Petraco.

Egypt’s natural gas production is known to surge by twenty percent with this offshore project brought to play. Along with this announcement, it was also made known there were two more discoveries in Nile Delta in August that could further add to its production.

The announcement came after the declaration of Export –Import Bank of US extended its support to RIL by sanctioning it a loan of $ 2.1 billion worth of loan and guarantee. This transaction is deemed to the single – largest ever one offered to a company including the direct loan amount and the guarantee offered.

RIL won the Egypt crude oil supply contract, irrespective of the fact that the BP had announced its selling of natural oil gas to Japan, based on the US Domestic gas prices that are higher than the usual gas oil prices for the first time. This contract will have the price for the BP gas source from the production in Egypt and Caribbean region.

According to sources, the company might infuse a colossal amount of $ 10 billion in Egypt period for over a period of five years. The association RIL- BP is also known to invest around $ 7.2 billion in India. Based on the contract, the Cabinet Committee on Economic Affairs had confirmed a purchase of around 30% participating interest in the 21 oil and gas blocks of RIL including its mainstay, KGD6 block, by BP.

The two energy giants have been jointly drilling on a satellite discovery that borders the gas fields in the KGD6 block. BP recently announced that it is optimistic about the growth potential of its Indian partnership, after its 16-month journey with RIL. The association has served to be beneficial for both the parties as RIL avails access to sophisticated technology, enabling it to leverage its hydrocarbon assets in a better way and on the other hand, it allowed BP to foray in India and expand its footprint globally.