1. By-
Prashant Chauhan A-06
Pritesh Gianchandani B-17

2. British Petroleum Completed $ 7.2 billion alliance with Reliance
in India
Carl-Henric Svanberg with Mukesh Ambani and Bob Dudley
Global oil major British Petroleum entered a historic oil and gas transformational partnership
with India’s Reliance Industries valued at $ 7.2 billion. As per the agreement, the British oil firm
would have a thirty percent stake in 23 oil and gas production contracts that Reliance operates
in the country. What is more, the two firms have also established a 50:50 joint venture for both
sourcing as well as marketing of gas in the country.

3. Quote- “With this partnership, we can not only draw synergies that includes skills of
both the companies, but also stay focused on finding more hydrocarbons in the deep
water blocks of India. With our mutual expertise and marketing skills the partnership
can contribute in a big way to India's ever growing energy security needs".

4. Benefits of Alliance to Reliance :-
*The joint venture will also accelerate the
creation of infrastructure for receiving,
transporting and marketing of natural gas in
India.
*The transformational partnership will
combine BP’s world-class deepwater
exploration and development capabilities
with Reliance’s project management and
operations expertise

5. Benefits of Alliance to BP:-
*This partnership meets BP’s strategy of forming alliances with strong national
partners, taking material positions in significant hydrocarbon basins and increasing
our exposure to growing energy markets,” Carl-Henric Svanberg, Chairman of BP.
*The firm would pay Reliance $ 7 .2 billion for the interests to be acquired in the 23
production sharing contracts. An additional $ 1.8 billion could be paid based on
exploration success that results in development of commercial discoveries.
The total combined investment could amount to $ 20 billion.

6. BP Positioning about Alliance:-
* This transaction represents one of the largest
foreign direct investments into India. The 23 oil
and gas blocks cover an estimated 270,000
square kilometres, making this partnership
India’s largest private sector holder of
exploration acreage.
* “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,” Robert Dudley, BP
Group Chief Executive.

7. FACTS OF ALLIANCE:-
*Reliance Industries and BP have completed the $7.2-billion deal in which the British company
will pick up 30% in 21 blocks, including D-6, where technical expertise of the oil major is
expected to reverse the decline in output from India's biggest gas field.
*BP, the first global oil major to make a significant investment in India, will form a 50:50 joint
venture with Reliance Industries for sourcing and marketing of gas in India which will also
accelerate the development of infrastructure in the sector.
*Technical experts from both companies are expected to quickly work out ways to address the
problems at the D-6 block in the Bay of Bengal. Reliance's gas output has dipped below 50
million metric standard cubic metres a day instead of rising to 80 mmscmd as the deep-sea
reservoir turned out to be structurally different from what was imagined during surveys.
* "This major investment is directly aligned with our strategy of creating long-term value by
forming alliances with strong national partners, gaining material positions in significant
hydrocarbon basins and increasing our exposure to growing energy markets.“
* In addition to the $7.2 billion initial investment, BP may pay another $1.8 billion to Reliance
depending on commercial discoveries in the exploration blocks in which it is buying stake.

8. ACTUAL PLAN – KG D6 BLOCK EXPLORATION
BP and Reliance to spend $1 billion into KG-D6 Block
Reliance and BP in upstream and midstream Alliance
On August 7th, 2012, BP and Reliance Industries Ltd (RIL) received from the India Oil Ministry
the conditional approval for the production compensation of the declining offshore KG-D6 gas
field.
AREA OF DEAL
Map of deal interests – BP and Reliance entered a strategic alliance to join their forces on India's oil and gas
markets in summer 2011. Furthermore, BP acquired a 30 percent stake in 21 oil and gas production sharing
contracts of Reliance in India, including the producing KG D6 block. (Picture: PROCESS India)

9. *This decision was accelerated after three years of discussions in front of the
depletion speed the matured KG-D6 natural gas field.
*To compensate this loss, RIL and BP had in the meantime performed a drilling
campaign in the KG-D6 Block to explore potential satellites fields and made three gas
discoveries in D29, D30 and D31.
*But the development of these discoveries which was stocked since then is now
becoming possible.
*On August 30th 2012, BP completed the acquisition of 30% interest in 21 oil and gas
production sharing contracts (PSC), including the KG-D6 Block, operated by RIL.
*As a result, the KG-D6 Block has working interest shared between:
- Reliance 60%, is the operator
- BP 30%
- Niko Resources from Canada 10%

10. These 21 blocks lie between shallow water of 400 meter depth and deep water exceeding 3,000
meters depth
*As part of these 21 blocks, the KG-D6 Block is producing
1.6 billion cf/d of natural gas
representing 40% of total India production and 30% of its consumption.
*To support the production sharing contracts, RIL and BP defined a strategic alliance where:
- Reliance will maintain its large project management and operator experience
- BP will provide the partnership with its global subsea expertise in deep - ultra deep water,
and in exploration and production enhancement.

11. *For the acquisition of 30% of the 21 production sharing contracts, BP will pay Reliance $7.2
billion.
*BP justifies this capital expenditure because gas is expected to be the fastest growing
fossil fuel in India, with demand growing at a rate of nearly 5% per year between 2010 and
2030.
*The total Indian gas consumption is projected to grow to12.5 billion cf/d in 2025, and to
exceed 15 billion cf/d in 2030.
* RIL-BP’s KG-D6 project to secure 30% of India natural gas consumption
*In order to restore the expected plateau production of the KG-D6 Block, BP and Reliance
are working on an integrated development scheme which would include the three
discoveries as soon as commercially available, together with 13 other discoveries lying in
the 21 production sharing contracts.
*This integrated development scheme will include to drill additional appraisal and test
wells to confirm the long term sustainability of the discoveries and the capacity of their
reserves to compensate the natural depletion of the KG-D6 Block.
*BP and Reliance estimated the capital expenditure to complete the exploration and
development of the new finds and to add all the corresponding infrastructures for a
commercial production to $1 billion.

12. *The success of this giant upstream KG-D6 project is critical for India as well as for the partners
since BP and Reliance had signed in parallel a partnership for the storage, transportation and
distribution of natural gas in India.
*In November 2011, BP and Reliance established the India Gas Solutions Pvt. Ltd. (India Gas),
to develop the global sourcing and local marketing of the natural gas in India.
India Gas‘s mission also includes the import of Liquefied Natural Gas (LNG).
*India Gas is 50/50 owned by Reliance and BP where the two companies will bring their
competence and resources to revamp, upgrade and expand the infrastructures for the storage,
transportation and distribution of natural gas in India including the administration of the
existing gas contracts to KG-D6 customers.
*So the partnership between Reliance Industries Ltd (RIL) and BP is not limited to a punctual
production sharing contracts for a specific project but to a long term integrated upstream-
midstream alliance to secure the production and distribution of natural gas in India
representing 30% of the local demand.

13. THANK
YOU!!!