Proposed assignment of 30% of Participating Interest under Article 28.1 of the Production Sharing Contracts by Reliance Industries Limited to BP Exploration (Alpha) Limited in NELP Blocks
The Cabinet Committee on Economic Affairs today approved the proposal to grant consent to the transfer of 30% of Participating Interest of Reliance India Limited to BP Exploration (Alpha) Limited in 21 blocks, by excluding blocks AS-ONN-2000/1 and NEC-DWN-2002/1, subject to submission of all guarantees and documents by the assignee viz., BP Exploration (Alpha) Limited in terms of provisions of the respective PSCs.
Further, Ministry of Petroleum & Natural Gas (MoP&NG) may subsequently take a suitable administrative decision in respect of the issues pending in respect of two blocks AS-ONN-2000/1 and NEC-DWN-2002/1. Based on such decisions, MoP&NG may in future grant or refuse consent to transfer of 30% Participating Interest in these two blocks.
It is expected that proposed transfer of 30% PI of RIL to BP Exploration (Alpha) Limited in respect of 21 blocks would bring vast technical expertise into the blocks.
Background to the case:
Government of India has entered into PSCs with RIL in 26 Oil and Gas blocks. RIL vide their letters dated 24.02.2011 and 25.02.2011 informed that they have entered into an agreement whereby RIL has agreed to farm out 30% participating Interest in the (4+19) 23 designated blocks to BP Exploration (Alpha) Limited and accordingly have sought the approval of the Government of India as required under Article 28.1 of the PSCs. Out of these 23 blocks, the Participating Interest of RIL is 100% in 17 blocks, whereas in the remaining 6 blocks, RIL holds interest along with other companies. The decision will be communicated to RIL and BP Exploration (Alpha) Limited immediately on receipt of CCEA approval.
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