The petroleum and natural gas ministry has sought security clearance from the home ministry for allowing UK's BP Plc to buy 30 per cent stake in most of the Reliance Industries' oil and gas blocks, including the giant KG-D6 off east coast, according to a report.
Upstream regulator Directorate General of Hydrocarbons (DGH) has processed the application made by Reliance for transfer of its 30 per cent interest in 23 oil and gas blocks and sent its recommendation to the oil ministry, according to The Economic Times.
The paper quoted and unnamed official as saying, ''DGH had sought some clarifications on the $7.2 billion deal which Reliance has already provided. Now, the petroleum ministry has approached home ministry for a no-objection."
Europe's second biggest oil company will pay $7.2 billion for a 30 per cent stake in 23 out of 26 exploration blocks held by Reliance, besides a performance payment of up to $1.8 billion if the tie-up leads to the development of commercial discoveries, the report adds.
The official said after the no-objection certificate is issued, the oil ministry may accord an in-principle approval to the transaction, after which amendments to the production sharing contracts (PSCs) of the 23 blocks would be done by inducting BP as a partner.
Reliance will continue to operate all the 23 blocks. It is hoping BP will help it reverse the sagging output from Krishna-Godavari D6 gas fields. Output at KG-D6 fields has fallen from 60.5 million standard cubic metres per day achieved in March last year to around 50 mmscmd currently.