Reliance Industries Ltd (RIL) and British Petroleum (BP) have formally announced the incorporation of India Gas Solutions Pvt Ltd, an equal-equity joint venture that will focus on global sourcing and marketing of natural gas in India.
This is part of the multi-billion-dollar transaction announced earlier this year where RIL has said that it will sell 30 per cent stake in 23 oil and gas production sharing contracts that it operates in India (including the KG D6 block) to BP for $7.2 billion, in one of the biggest-ever inbound transactions in the country.
The pay-out by BP might add up to another $1.8 billion, based on exploration success that results in development of commercial discoveries. These payments and combined investment might amount to $20 billion, the company disclosed in February.
The joint venture will also develop infrastructure to accelerate transportation and marketing of natural gas within the country.
The firm will have a 12-member board, with equal representation from both the partners. Kris Sliger of BP will chair the board while Reliance Industries’ Bibhas Ganguly will be the vice-chairman.
Hiten Mehta of BP will be the chief executive of the venture while Suresh Manglani of RIL will be the chief financial officer and Amit Mehta of RIL will be the COO. BP’s Brian Dodson will be the chief commercial officer.
The JV will have 30 employees, to begin with, and it will also assume the administration of the existing gas contracts to KG-D6 customers besides other opportunities, the company disclosed on Friday.
PMS Prasad, executive director at RIL said, “Demand for gas has been growing at an exponential rate and we anticipate natural gas to emerge as the preferred choice of fuel, given its properties as a cleaner and sustainable fuel source.”