Government gives RIL-BP deal the green flag

Mukesh Ambani led Reliance Industries Limited (RIL) has received a go-ahead from the central government for its much acclaimed and anticipated deal with London based energy major BP PLc. The RIL-BP deal will see BP stake a 30 per cent share in 23 oil and gas acreages of Reliance, including RIL’s most commended oil and gas block of KG-D6. This deal spans a length of over 270,000 square kilometers, across 23 oil and gas blocks, making the partnership India’s largest private sector holder of exploration acreage. Following this official sanction, both RIL and BP will work together to concretize the deal efficiently and effectively. RIL, in its official statement, said that it is grateful to the government for granting approval for a deal which will result in the largest foreign investment in the domestic hydrocarbon sector

The deal between RIL and BP will see RIL harvest BP’s technical expertise for productive exploration and development of deep sea reserves while BP will mark its entry into Asia’s second largest energy consuming nation. Since BP is known for its technical dexterity in tapping deep sea exploration blocks, it was the likely partner for RIL in its ambitious pursuit. The limited reserves off the cost of Andhra Pradesh, which carry half the volume of stipulated quantity as established on initial examination, pose a serious challenge to its operator and Reliance hopes to tackle the situation by bringing in the best in the trade to do the needful.

The RIL-BP deal is equally prolific as it reflects the growing power and potential of private players in a sector that has, so far, been dominated by public sector operators. Private operators like RIL are today developing far-reaching measures to reap the most out of every reserve rather than probe around for additional acreage to develop. With concern for energy security now mounting, efforts of players like RIL are reassuring that nation’s reserves are being harnessed to their full potential through the best technical assistance there is.

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