BP is to pump billions into tie-up with Indian energy giant

BP has announced a ' transformational' oil and gas partnership with India's largest energy company, in a deal worth up to £12billion.

The London-listed oil supermajor will pay India's Reliance Industries an initial £4.4billion for a 30 per cent stake in 23 oil and gas prospects in one of the world's fastest-growing economies.

It will pay Reliance a further £1.1billion if exploration yields commercial discoveries and said that the two firms' combined investment could reach £12.3billion.

Strategy: BP is seeking partnerships in countries rich in natural resources

Strategy: BP is seeking partnerships in countries rich in natural resources

The tie-up conforms with chief executive Bob Dudley's strategy of seeking partnerships in countries rich in natural resources.

In Reliance - India's largest private sector company - BP appears to have found a partner with the scale and reputation it is seeking for future exploration projects.


The assets BP is buying into are largely gas-focused, producing some 1.8billion cubic feet of gas per day, more than 30 per cent of India's total consumption and more than 40 per cent of its total production.

According to BP's Energy Outlook 2030 report Indian demand is increasing at one of the fastest paces in the world.

Energy consumption has grown by 190 per cent during the past 20 years and is scheduled to grow by a further 115 per cent in the next 20 years.

The need to tap into the energy resources of emerging economies has seen Dudley launch a strategic shift of focus. This has seen BP (down 1.45p to 491.55p) sign a share swap and exploration partnership with Russian oil firm Rosneft, subject to arbitration following protests from joint venture TNK-BP.

Chancellor George Osborne, who was part of a trade delegation to India last year, said: 'I think it will be good for the Indian people, good for Indian industry and good for the British people as well.'