India approved reliance-BP deal $7.2 billion

NEW DELHI - India Friday approved proposed $7.2 billion sale of assets to BP PLC reliance Industries Ltd., paving the way for the u.k.-oil Giants biggest venture in the South Asian nation.

Ben Stanton all/Agence France-Presse/Getty Images reliance industries Chairman and Managing Director Mukesh Ambani addresses one press conference with BP Chief Executive Bob Dudley and Chairman Carl-Henrik Svanberg (not shown) in the Centre of London on 21 February 2011.

Companies have been waiting for approval by the Federal Government controlled agreed since February as reliance, by billionaire Mukesh Ambani a 30% stake in BP 23 oil and gas blocks for $7.2 billion plus another $1.8 billion selling exploration success combined. The business encompasses the D6 block in the Krishna Godavari basin, India's richest gas find so far, and reliance already $2 billion received from BP.

Oil Minister Jaipal Reddy said that his Ministry is the Cabinet Committee on Economic Affairs, to approve the offer for 21 blocks, since there were some technical problems on two non-producing units. The Ministry can in future grant or refuse consent on the two blocks, he added.

"This is one of the large foreign investments in the history of India," said Mr Reddy. "This transaction means not only investments of $7.2 billion by a foreign company in India, it means also the induction of vast knowledge on the India's hydrocarbon sector".

Under the February agreement, BP and confidence create an equally-owned joint venture for the procurement and distribution of natural gas in India. The venture requires no approval of the Government.

BP Chief Executive, Robert Dudley, said the energy giant is hoping that business in a matter of weeks to complete.

Dependency not immediately comment on the announcement.

Investments in future develop Indian assets bring your total payments on $20 billion, BP previously had said.

The deal continues to increase exploration BP access to new hydrocarbon resources and markets in line with its strategy and access to new exploration, especially as it still resume, drilling in the Gulf of Mexico after the last year's oil spill areas it.

Trust drilling is know-how to increase gas production expected by BP "Deepwater" by to win. The company D6 block expects that boost, but more technical and geological problems led India's gas output from the field of the eastern coast of below 50 million metric standard cubic metres per day of 60 MMSCMD last year.

Depending on the market valuation has a hit due to, including the decline in the production of gas emitted. Its shares closed at 873.60 rupees ($19.67) before the announcement on the Bombay Stock Exchange 1.5%. The benchmark index closed up 1.6%.

-Eric Yep in Mumbai & Alexis Flynn in London contributed to this report.

Write to Rakesh Sharma at the rakesh.sharma@dowjones.com and Mukesh Jagota at mukesh.jagota@dowjones.com

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