“India is one of the fastest growing economies in the world. By allying ourselves with Reliance, we will access the most prolific gas basin in India and secure a place in the fast growing Indian gas markets, creating a genuinely distinctive BP position,” said Bob Dudley. “BP looks forward to a long and successful working partnership with Reliance.”
Completion of the transactions is subject to Indian regulatory approvals and other customary conditions. BP has been working with Reliance since December 2008 on the D-17 deepwater block in the Krishna Godavari (KG) basin on the east coast of India. BP, with a 50 per cent interest, operates the block and Reliance holds the remaining interest.
Reliance Industries Limited (RIL) is India’s largest private sector company on all major financial parameters with a turnover of Rs 2,00,400 crore (US$44.6 billion), cash profit of `Rs 27,933 crore (US$6.2 billion), net profit of Rs 16,236 crore (US$3.6 billion) and net worth of Rs 1,37,171 crore (US$30.6 billion) as of March 31, 2010.
RIL is the first private sector company from India to feature in the Fortune Global 500 list of 'World's Largest Corporations' and ranks 100th amongst the world's Top 200 companies in terms of profits. RIL ranks 68th in the Financial Times FT Global 500 list of the world's largest companies. RIL is rated as the 15th Most Innovative Company' in the World in a survey conducted by the US financial publication - Business Week in collaboration with the Boston Consulting Group.
BP has a strong presence in India in addition to its interest in block D-17. Castrol India Limited is a market leader in the retail automotive lubricant business, including car engine oils, premium 4-stroke motorcycle oils and multi-grade diesel engine oils. Castrol India also operates in the industrial and marine lubricants markets. Tata BP Solar, a joint venture between BP Solar and the Tata Group, has been operating in India since 1989.
It is a leader in the Indian solar energy market, manufacturing solar cells, solar PV modules and systems. BP employs around 8,000 people (both direct and indirect staff) in India, with its main centres of employment in Mumbai, Delhi, Bangalore, Calcutta and Chennai. According to BP’s Energy Outlook 2030, energy consumption in India has grown by 190% over the past 20 years and is likely to grow by 115% over the next 20 years, a rate of over 4% per annum.
Gas is expected to be the fastest growing fossil fuel, with demand growing at a rate of nearly 5% a year between 2010 and 2030. India’s gas consumption was 5.0 bcf/d in 2009 and is estimated to have been 6.1 bcf/d in 2010 (comprising 4.9 bcf/d production plus 1.2 bcf/d LNG imports). Total Indian gas consumption is projected to grow to12.5 bcf/d in 2025,and exceed 15 bcf/d in 2030.
The aggregate gross profits attributable to BP’s 30 percent share of the 23 production sharing contracts to be acquired is Rs. 1336 Crores (c. US$300 Million), as derived from the aggregate EBIT under the production sharing contracts for the financial year ending 31 March 2010.
