It’s a deal that could change the face of India’s energy business. UK-based energy giant BP has agreed to pay $7.2 billion to buy a 30% stake in RIL’s hydrocarbon fields. The deal covers 23 of RIL’s oil and gas blocks including the lucrative KG D6 block in the Bay of Bengal. BP could also pay RIL an extra $1.8 billion based on future performance. What’s more, the two companies will create a 50:50 joint venture for marketing and sourcing gas. Overall, RIL says BP’s investments and payments might reach $20 billion. Shares of RIL jumped 2.04% on the BSE to 965.50 by the end of trade.
In other news, the budget session of Parliament got started on Monday, with the President’s annual speech laying out the government’s priorities. Addressing both houses, President Pratibha Patil said her government would fight inflation while also helping ordinary people cope with rising prices. She said sustaining economic growth would be crucial-- along with working to spread its benefits to the poor. Patil added that her government was committed to making the domestic environment more conducive to foreign investment. FDI inflows into India fell 23% to about $16.03 billion in the period from April to December.
The president’s speech also stressed other issues affecting the ruling UPA coalition. These include tackling corruption, creating more jobs, and dealing with security threats.