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BP strikes $7.2 billion oil deal with Indian company

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BP strikes $7.2 billion oil deal with Indian company

Jorge Hernandez February 21, 2011

British Petroleum (BP) has partnered with Reliance Industries Limited for a 30 percent stake in 23 oil and gas blocks in India, according to the Wall Street Journal. The deal, contracted for $7.2 billion, is worth a potential $20 billion in future performance payments and total investment depending on "exploration success" in the emerging market.

"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," Bob Dudley, BP chief executive, told the news source.

Reliance Industries Limited is part of The Reliance Group, India's largest private sector enterprise, founded by Dhirubhai H. Ambani in 1966.

The company is now run by Mukesh Ambani, Dhirubhai's son, one of the wealthiest men in Asia.

BP was involved in the Deepwater Horizon oil spill in the summer of 2010, which drew international attention and harsh criticism. The incident led to BP's first annual loss in nearly 20 years, reported the Associated Free Press (AFP).

After Dudley announced the new deal with India, he commented on the current developments of BP in Libya, reports Bloomberg. Due to increasing political instability in northern Africa, BP will be evacuating employees from Libya, although Dudley assured the press that BP "will remain committed to doing business in Libya."

BP plans to reduce its refining business in the United States by half and has recently entered into a deal with Russia's government-run oil company, Rosneft, in a bid for Artic oil, reported the AFP.