BP in £4.5bn Indian oil and gas deal

This marks the second major deal under BP’s new chief executive Bob Dudley, who last month agreed a share swap with Russia’s state-controlled Rosneft to jointly explore the Arctic for offshore oil and gas.

BP said yesterday it would pay Reliance Industries $7.2bn (£4.5bn) and performance payments of up to $1.8bn (£1.12bn) if the tie-up led to the development of commercial discoveries.

Mukesh Ambani, chairman and managing director of Reliance Industries, said: “BP is the best finder of hydrocarbons in deepwater in the world.”

BP wants to put last year’s Gulf of Mexico oil spill disaster behind it, and said earlier this month it would look for long-term growth through a fresh focus on discovering oil and gas via exploration partnerships.

The oil spill prompted a $30bn (£18.75bn) asset disposal programme to help to cover BP’s costs but Mr Dudley said BP still had plenty of cash to fund the investment in Reliance assets at a price equivalent to $7.50 (£4.68p) a barrel. “We’ve been divesting assets at around $12 (£7.50p) per barrel so for us this is a sensible transaction,” he added.

BP will take a 30 per cent stake in 23 oil and gas blocks and form a 50:50 joint venture for sourcing and marketing gas.

Oswald Clint, from wealth manager Sanford Bernstein, said: “It’s kind of similar to the Russian deal – it’s getting access to longer-term positions which could be material.”