- Wealth PMS
BP will pay $7.2 billion to Reliance Industries to take 30% stake in 23 oil and gas blocks, and another $1.8 bn based on performance. This is the second BP deal worldwide, after a $8 bn equity swap with Rosneft in Russia. BP will also set up a 50:50 joint venture for marketing LNG.
This is a good deal for RIL. It was getting flak for not being able to pump in more gas or explore more, and it really hasn’t built deepwater capabilities yet. BP can also augment the near-term lack of gas by external supplies and feed into the distribution setup RIL has built which is currently not used much. It’s huge for the gas industry in India if the distribution setup takes off – NG is an amazing fuel and if you fix transportation it can change our energy profile.
RIL went up 2% yesterday to 957. But nothing spectacular in terms of volumes, honestly. 555 crores on an expiry week is par for the course. Let’s see how the markets react today.