The home ministry has given unconditional approval for UK giant BP to buy a 30% stake in Reliance Industries Ltd’s (RIL’s) oil and gas blocks, including the showcase KG-D6 gas fields, for $7.2 billion.
The Ministry of Home Affairs wrote a one-page letter to the petroleum ministry on June 1, giving security clearance and a no-objection certificate for BP buying the stake in 23 oil and gas blocks owned by RIL, an oil ministry official said on Wednesday.
While the NOC to the RIL-BP deal is unconditional, the home ministry asked if RIL could not have offered the stake to state-owned gas utility GAIL India or any other public sector unit.
“Our PSUs do not have the expertise RIL has been looking for. It wanted an expert in deepsea technology and GAIL, which is a gas marketing and transportation company, hardly fits the description,” he said.
RIL wants to leverage the worldwide experience of Europe’s second biggest energy company to resolve sub-surface technical issues at its KG-D6 fields, where production has fallen from 61.5 million standard cubic metres per day to about 48 mmscmd, instead of rising to the planned 69 mmscmd. RIL hopes BP will help fix the reservoir issues and rapidly raise output to the peak of 80 mmscmd.