BP is to acquire a 30% stake in 23 offshore oil and gas production sharing contracts operated by Reliance in India and will form a joint venture to source and market gas in the country.

The total contract, including the stake and the formation of the 50:50 joint venture, is worth $7.2bn.

The 23 oil and gas blocks cover 270,000km² and lie in water depths ranging from 400m to over 3,000m.

The blocks, including KG D6, produce about 1.8 billion cubic feet of gas per day, which amounts to over 30% of India’s total consumption and over 40% of the country’s total production.

Under the production sharing contracts, Reliance will continue as operator for the exploration acreages.

Based on exploration successes, future performance payments of up to $1.8bn could be paid by BP. These payments and the combined investment may amount to $20bn for the contract.