Reliance, BP Need to Sign New Contract With Govt to Develop O&G Blocks

MUMBAI (Dow Jones Newswires), Sep. 15, 2011

BP will be able to start work on jointly developing Reliance's oil and gas blocks in India only after a revised production-sharing contract is drafted and signed by the stakeholders, India's upstream regulator said Thursday.

"The amendment to the production-sharing contract is yet to be signed. BP will come in only when the amendment is signed," S.K. Srivastava, Director at the Directorate General of Hydrocarbons, told reporters on the sidelines of an industry conference.

In the production-sharing contract, the explorers agree with the government to bear risks, production and development costs in return for a share of production.

Srivastava said that Reliance is yet to approach the regulator with a new draft of the contract.

Reliance on Aug. 30 closed a deal with BP to sell a 30% stake in its 21 oil and gas exploration blocks in India to the U.K.-based explorer.

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