The approval to one of the biggest acquisition deals in the oil sector involving key global oil firms and major Indian player was accorded by Cabinet Committee on Economic Affairs (CCEA) Chaired by Prime Minister Manmohan Singh.
“The CCEA has given approval for BP acquiring stake in 21 of the 23 blocks of the RIL,” Petroleum Minister Jaipal Reddy told reporters after the Cabinet meeting.
These 21 blocks in which BP would acquire 30 per cent share include Reliance’s gas rich KG-D6 gas fields located in the off-shore of country’s eastern court. For technical reasons approval could not be accorded to two other blocks, Reddy said.
Though the petroleum ministry has “more or less” agreed to approve the deal it wanted that the details of the deal be vetted by a large government body like the CCEA, sources said. The petroleum ministry had proposed that conditional approval for two blocks could be given pending resolution of the issue between the Directorate General of Hydrocarbons and the operator, RIL.
The ministry had recommended that 21 blocks could get unconditional approval. But for two blocks, which are located in Assam and in North East Basin — the approval could be conditional. This is because the exploration phase status of 21 blocks was clear. But for the remaining two blocks the DGH and Reliance Industries, hold divergent views on the exploration phase. The deal after being examined by the finance ministry and home ministry got the clearance of CCEA. The deal is assuming importance as it would enable RIL to benefit from BP’s deepwater exploration expertise, in turn boosting the country’s production of gas, demand for which is rising manifold in view of economic expansion.