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BP to take over 30% stake in RIL’s 23 oil and gas blocks
RIL and British oil major British Petroleum (BP) announced a historic partnership between the
two companies. As per the agreement, BP will buy 30% stake in RIL’s 23 oil and gas blocks,
including the giant KG-D6 gas fields off the east coast, for US $7.2bn, thus valuing the 23
blocks at whopping US $24bn. BP could further pay US $1.8bn on exploration success,
which would result in the development of commercial discoveries. However, RIL will continue
to be the operator in all 23 blocks. Thus, the joint venture agreement, valued at US $9bn, is
one of the biggest foreign direct investments in the country. These payments and combined
investment could amount to US $20bn.
Besides this, RIL has also signed a 50:50 joint venture agreement with BP for the sourcing
and marketing of gas in India. The JV will also create infrastructure for receiving,
transporting and marketing natural gas in India.
We believe the deal will benefit RIL as BP is one of the largest energy majors and one of the
finest deep water exploration companies in the world. This partnership will combine the
technical expertise of both the companies and will be focused on finding more hydrocarbons
in the deep water blocks of India. The partnership also meets BP's strategy of forming
alliances with strong national partners, taking material positions in significant hydrocarbon
basins and increasing exposure to growing energy markets such as India. We maintain our
positive view on RIL and have a Buy recommendation on the stock. However, we will review
our earnings and target price once we get more clarity on the transaction details.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
BP to take over 30% stake in RIL’s 23 oil and gas blocks
RIL and British oil major British Petroleum (BP) announced a historic partnership between the
two companies. As per the agreement, BP will buy 30% stake in RIL’s 23 oil and gas blocks,
including the giant KG-D6 gas fields off the east coast, for US $7.2bn, thus valuing the 23
blocks at whopping US $24bn. BP could further pay US $1.8bn on exploration success,
which would result in the development of commercial discoveries. However, RIL will continue
to be the operator in all 23 blocks. Thus, the joint venture agreement, valued at US $9bn, is
one of the biggest foreign direct investments in the country. These payments and combined
investment could amount to US $20bn.
Besides this, RIL has also signed a 50:50 joint venture agreement with BP for the sourcing
and marketing of gas in India. The JV will also create infrastructure for receiving,
transporting and marketing natural gas in India.
We believe the deal will benefit RIL as BP is one of the largest energy majors and one of the
finest deep water exploration companies in the world. This partnership will combine the
technical expertise of both the companies and will be focused on finding more hydrocarbons
in the deep water blocks of India. The partnership also meets BP's strategy of forming
alliances with strong national partners, taking material positions in significant hydrocarbon
basins and increasing exposure to growing energy markets such as India. We maintain our
positive view on RIL and have a Buy recommendation on the stock. However, we will review
our earnings and target price once we get more clarity on the transaction details.
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