RELIANCE-2NDLD-BP 2

The USD 7.2 billion deal is seen as the biggest FDI into
India. Other proposed big transaction--Posco's 12 billion
investment announced years ago for a steel plant in Orissa--
is yet to take off.
Describing the deal with BP as "transformational
partnership", Ambani said BP will help in higher recovery and
unlock "huge potential of vast but unexplored" acreage on the
east coast.
Stating that BP and Reliance had been in discussions
since late 2007, Dudley said BP had set aside financial
resources to meet the firm's financial obligation in the US
oil spill case and has also done so for this deal. He did not
elaborate.
BP, which last year sold its assets in Pakistan as part
of USD 22 billion in disposals worldwide to help pay for the
Gulf of Mexico spill, had earlier this year agreed to explore
an area of Russia's Arctic waters about the size of the UK
North Sea with OAO Rosneft.
Reliance is the operator in all the 23 blocks while
Canadian Niko Resources and UK's Hardy Oil have minority 10
per cent interest in a few. After the deal, Reliance holding
in the blocks will come down to 60-70 per cent. 19 out of 23
blocks lie off the east coast while two blocks are onland in
Assam and Gujarat.
Ambani said Reliance wanted a single long term partner
instead of seeking separat partner for every block. "We expect
to rigourously explore and find more hydrocarbon resources."
"In Reliance's assessment, BP is the best finder of
hydrocarbon in deepwater in the world," he said.
Reliance currently produces about 50-52 million standard
cubic meters per day of natural gas from its mainstay KG-D6
fields off the Andhra coast. Niko Resources of Canada has 10
per cent interest in the block and after the BP deal,
Reliance's stake would fall to 60 per cent.
Besides KG-D6, Reliance's second biggest discovery block
is NEC-25 in the Mahanadi basis off the Orissa coast. It has
so far made 15 exploratory success in the block, where Niko
holds 10 per cent stake. Post BP deal, Reliance stake in this
block too will fall to 60 per cent.
Reliance has potential resource of 9.5 Tcf in KG-D3 block
with Hardy Oil. Hardy has 10 per cent interest and Reliance 90
per cent. Besides, it has made oil discoveries in Cambay
onland block.
Its equal joint venture with BP will also endeavour to
accelerate the creation of infrastructure for receiving,
transporting and marketing of natural gas in India.
The 23 oil and gas blocks together cover approximately
270,000 square kilometres.
Ambani said: "This partnership combines the skills of
both companies and will be focused on finding more
hydrocarbons in the deep water blocks of India and
significantly contribute to India's energy security."
For BP, Reliance is a natural partner in India, given its
strong position in the Indian market. MORE PTI