RIL-BP deal to get a nod of approval from Cabinet

<p>Despite speculations of a deemed approval already in place, the oil ministry, on Wednesday, said that it has recommended the $ 7.2 billion (Rs. 32,400 crore) RIL-BP deal to the Cabinet Committee on Economic Affairs (CCEA) for a concrete sanction from the body. The petroleum ministry has supported the proposal that foresees Mukesh Ambani owned Reliance Industries Limited (RIL) delegate a 30 per cent stake in its 23 oil and gas blocks, including RIL’s gas producing KG D6 block – one of nation’s biggest gas assets – to London based British Petroleum (BP), paving way for realization of this milestone deal that welcomes significant FDI to the country via India’s leading energy enterprise.</p>

<p>The oil ministry has sought consent of cabinet on approval of this deal, given the magnitude of the deal. RIL had requested a sanction earlier this February and although according to constitutional amendment that suggests government consent as ‘deemed’ in the event it has not provided a consent in the stipulated time period of 120 days from the day of request, the oil ministry and RIL have both agreed to having a written approval framed by the cabinet.</p>

<p>The RIL-BP deal is a significant prospect to find ground in Indian domain. This deal will allow Mukesh Ambani led RIL to adopt BP’s advanced technical assistance in exploring its oil and gas blocks, while BP marks its entry in India’s exploration and production business with an opportunity to tap into the demand that clouds Asia’s second biggest energy consuming nation. According to BP’s Energy Outlook 2030, energy consumption in India has risen by 190% over the past 20 years and is likely to increase further by 115% over the next 20 years, at a rate of over 4% per annum. The deal is likely to stretch on a long term basis in order to ‘develop a gas-based economy in an efficient manner’, as per BP statements. This will enable BP to establish a ready footprint in India’s booming gas markets, while RIL employs BP’s expertise for harnessing the most out of its exploration blocks.</p>