Strategic alliance deal reliance & bp. (sadiq


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Strategic alliance deal reliance & bp

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Strategic alliance deal reliance & bp. (sadiq

  1. 1. By: Sadiq Ahmed Shariff
  2. 2. A Strategic Alliance is a relationshipbetween two or more parties to pursue a set ofagreed upon goals or to meet a critical businessneed while remaining independentorganizations. This form of cooperation liesbetween M&A and organic growth. Partners may provide the strategic alliancewith resources such as products, distributionchannels, manufacturing capability, projectfunding, capitalequipment, knowledge, expertise, orintellectual property.
  3. 3. The Alliance is a cooperation orcollaboration which aims for a synergy whereeach partner hopes that the benefits from thealliance will be greater than those fromindividual efforts. The alliance often involves technologytransfer, economic specialization, sharedexpenses and shared risk.
  4. 4. RIL is an Indianconglomerate companyheadquartered in Mumbai,Maharashtra, India. Thecompany operates throughthree business segments:petrochemicals, refining,and oil and gas, othersegment of the companyincludes textile, retailbusiness, special economiczone (SEZ) developmentand telecom/broadbandbusiness.
  5. 5.  RIL is one of the largest publicly traded company in India by market capitalisation and is the second largest company in India by revenue after Indian Oil Corporation. It is also Indias largest private sector company by revenue and profit. The company is ranked 99th on Fortune Global 500 list of the worlds biggest corporations for the year 2012
  6. 6. BP is a British multinationaloil and gas company headquarteredin London, United Kingdom. It is thethird-largest energy companyand fourth-largest company in theworld measured by 2011 revenuesand is one of the six oil and gas"supermajors“. It is vertically integrated andoperates in all areas of the oil andgas industry including exploration& production, refining ,distributionmarketing, petrochemicals, powergeneration and trading. It alsohas renewable energy activitiesin bio fuels and wind power.
  7. 7.  BP has operations in over 80 countries, produces around 3.4 million barrels of oil equivalent per day and has around 21,800 service stations worldwide. Its largest division is BP America, which is the second-largest producer of oil and gas in the United States. BP owns 50% of TNK-BP, which is the third-largest oil company in Russia measured by both reserves and crude oil production..
  8. 8. Global oil major British Petroleum On February21, 2011 announced a historic oil and gastransformational partnership with India’s RelianceIndustries valued at $ 7.2 billion. As per theagreement, the British oil firm would have a 30%stake in 23 oil and gas production contracts thatReliance operates in the country. What is more, the two firms have also establisheda 50:50 joint venture for both sourcing as well asmarketing of gas in the country.
  9. 9. Mukesh Ambani, CMD of Reliance Industries said: "We are pleased to forge alliance with the British oil major. With this partnership, we can not only draw synergies that includes skills of both the companies, but also stay focused on finding more hydrocarbons in the deep water blocks of India. With our mutual expertise and marketing skills the partnership can contribute in a big way to Indias ever growing energy security needs“ According to the report, the joint venture will also accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India. The transformational partnership will combine BP’s world-class deepwater exploration and development capabilities with Reliance’s project management and operations expertise.
  10. 10. Carl-Henric Svanberg, Chairman of BP. Thefirm would pay Reliance $ 7 .2 billion for theinterests to be acquired in the 23 productionsharing contracts. An additional $ 1.8 billioncould be paid based on exploration successthat results in development of commercialdiscoveries. The total combined investmentcould amount to $ 20 billion, the reportnoted.
  11. 11. This transaction represents one of thelargest foreign direct investments into India.The 23 oil and gas blocks cover an estimated270,000 square kilometres, making thispartnership India’s largest private sectorholder of exploration acreage.