After its $7.2-billion deal with Reliance Industries, the UK-listed BP Plc has decided to set up an office here. “We will be setting up an office at the Bandra Kurla Complex. We are in the process of firming up other details,” said the company spokesperson.
After the deal, Sashi Mukundan will also hold the post of regional president, along with being country head, BP India. He moved here last month.
This February, RIL decided to sell 30 per cent stake in 23 of its oil and gas blocks to BP. On July 22, the Cabinet Committee on Economic Affairs cleared the stake sale in 21 blocks.
The deal may go up to $20 bn in value, based on future performance payments and investment. According to the production-sharing contract, BP will have to furnish a bank guarantee and performance guarantee.
While the deal gives BP a chance to enter India’s exploration and production segment, it will give RIL access to BP’s expertise in deep-water drilling and address the technical issues at its Krishna-Godavari (KG) field’s D6 block.
The Dhirubhai-1 and 3 gas fields in the KG-D6 block have seen output fall to 38.4 million standard cubic metres per day. According to projections, the output should have risen to about 70 mscmd by now.
Following the deal, RIL’s holding in the blocks will come down to 60-70 per cent. Niko holds 10 per cent. Nineteen of the blocks are off the east coast and two in Assam and Gujarat.
RIL and BP are to also form a 50:50 joint venture for the sourcing and marketing of gas in India and creation of infrastructure for receiving, transporting and marketing.
RIL’s second-biggest discovery block is NEC-25, off the Orissa coast. It holds potential gas resources of 9.5 trillion cubic feet in the KG-D3 block. Hardy has 10 per cent stake in the block and Reliance 90 per cent. It has also made oil discoveries in a Cambay inland block.
