Awwal 18, 1432 H/Feb 21, 2011, SPA -- British oil giant BP was on track Monday to become a key player in the Indian oil and gas market after signing a partnership agreement with Mumbai-based Reliance Industries worth up to 9 billion dollars. Under a deal sealed in London, BP will take a 30-per cent stake in 23 oil and gas production sharing contracts operated by Reliance in India. There will also be a 50-50 joint venture between the two companies for the sourcing and marketing of gas in India. The joint venture would "endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India," said a statement. The deal was signed by Robert Dudley, BP chief executive, and Mukesh Ambani, chairman and managing director of Reliance Industries Limited. The partnership would combine BP's "world-class deepwater exploration and development capabilities" with Reliance's project management and operations expertise, the companies said. BP will pay Reliance Industries Limited 7.2 billion dollars. Additional performance-based payments of up to 1.8 billion dollars could be paid, based on exploration success that results in development of commercial discoveries, the agreement said. The payments and combined investment could amount to 20 billion dollars. BP's "confidence in India is evident from the fact that the transaction constitutes one of the largest foreign direct investments into India," dpa quoted the company as saying in a statement. According to BP's Energy Outlook 2030, energy consumption in India has grown by 190 per cent over the past 20 years and is likely to grow by 115 per cent over the next 20 years - a growth rate of over 4 per cent per year. Gas is expected to be the fastest growing fossil fuel, with demand growing at a rate of nearly 5 per cent a year between 2010 and 2030. The agreement with India comes just a month after BP announced a 10-billion-dollar deal with Russian state energy company Rosneft over oil exploration in the Arctic. It follows BP restructuring in the wake of the Gulf of Mexico oil which damaged the company's standing in the US and prompted a strategy renewal. Last month, BP set out plans to sell US refineries and focus on emerging markets such as India as part of its recovery. "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 Dudley.
