± Global oil major BP will buy a 30% stake in Reliance Industries’ oil and gas blocks, including the D-6 block, for US$7.2bn as part of a long-term deal that involves a total investment of US$20bn. (ET)
Reliance Industries Ltd (RIL) and BP announced a major deal for E&P and gas marketing businesses. The highlights of the deal are as follows:
± BP will take a 30% stake in 23 oil and gas production sharing contracts that RIL operates in India, including the producing KG D6 block
± A 50:50 joint venture will be formed between the two companies for the sourcing and marketing of gas in India
± BP will pay RIL an aggregate consideration of US$7.2bn for the interests to be acquired in the 23 production sharing contracts.
Implications for RIL
± Deepwater technology expertise of BP to help RIL
± Lower interest outgo to offset lower profits from E&P EBIT from FY12
± Cash-flows to be strong for FY12
± Funds to be utilized for investments in other avenues such as power, telecom, shale gas etc
± Deal values RIL’s 23 blocks at US$24bn
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