The Reliance Industries-British Petroleum deal can dramatically transform the scenario in the Indian oil and gas market, which is still dominated by public sector companies like ONGC, Oil India and Gail India. However, it is going to be a serious test of the Indian regulatory regime, given the government’s stand on the Cairn-Vedanta deal.
RIL has been working mostly as an operator in the domestic oil and gas sector and this is the first time it has tied up with a major player in that sector.
The deal also reflects the growing significance of the Indian upstream sector on the global map given that this is the first time an international oil major is going to make such a huge investment. The company never participated in Nelp bidding for exploration acreage.
This is a strategic tie-up for RIL given that it would significantly gain from BP’s proven expertise in deep and ultra water exploration. Significantly, the bulk of India’s onland basins have already been explored. Deep water is the only area where new oil and gas finds are expected. It and high reward business, and is also capital and technology intensive.