BP’s intention to buy a 30 percent stake in Reliance Industries could lead to a large indirect footprint for the BP in Pennsylvania’s Marcellus Shale. Reliance, an oil and gas company, is India’s largest private company, and it’s about to get a lot bigger if the just announced deal passes through Indian regulators.
BP has agreed to pay Reliance $7.2 billion dollars, and if profits in the joint venture, which includes nearly two dozen oil and gas fields. If that deal exceeds profitable expectations, Reliance will receive an additional $1.8 billion.
Last spring, Reliance purchased a 40 percent stake in Atlas (another energy company) and acquired more than 42,000 acres in Southwestern Pennsylvania. Paying on average $4,532 an acre. Together these two companies now own 343,000 acres in the Marcellus play.
This is BP’s second immense deal in two months. In January, it signed a $7.8 billion dollar deal with a Russian company to drill in the Arctic. These deals follow last summer’s massive oil spill in the Gulf of Mexico.
If recent history is a determinant, the agreement between BP and Reliance could take months to finalize.
(To read more about the deal between Reliance and Atlas click on Rock The Capital.)
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