The Cabinet Committee on Economic Affairs on Friday approved Europe’s second largest oil company BP acquiring 30 per cent participating interest in 21 oil and gas blocks of Reliance Industries. The deal pegged at $7.2 billion, will be the single largest FDI into India.
While the original proposal was for acquiring a stake in 23 blocks, approval for two blocks has been withheld for technical reasons. These two blocks are currently not producing either oil and gas.
The oil ministry is seeking some clarification on these two blocks and could give approval for these two blocks in the coming days.
“There is no reservation against BP’s entry into the two blocks,” said petroleum minister S. Jaipal Reddy. The approved blocks include Reliance’s showcase oil block: KG-D6.
The BP agreement will help Reliance get access to technology and expertise to develop deepwater fields and help reverse the declining gas output from KG-D6, where production dropped around 22 per cent in the past year due to technical difficulties.