Strategic alliance deal reliance & bp

1. By: Sadiq Ahmed Shariff S
sadiq_shariff10@hotmail.com

2. A Strategic Alliance is a relationship
between two or more parties to pursue a set of
agreed upon goals or to meet a critical business
need while remaining independent
organizations. This form of cooperation lies
between M&A and organic growth.
Partners may provide the strategic alliance
with resources such as products, distribution
channels, manufacturing capability, project
funding, capital
equipment, knowledge, expertise, or
intellectual property.

3. The Alliance is a cooperation or
collaboration which aims for a synergy where
each partner hopes that the benefits from the
alliance will be greater than those from
individual efforts.
The alliance often involves technology
transfer, economic specialization, shared
expenses and shared risk.

4. RIL is an Indian
conglomerate company
headquartered in Mumbai,
Maharashtra, India. The
company operates through
three business segments:
petrochemicals, refining,
and oil and gas, other
segment of the company
includes textile, retail
business, special economic
zone (SEZ) development
and telecom/broadband
business.

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 India's largest private
sector company by revenue and profit. The
company is ranked 99th on Fortune Global
500 list of the world's biggest corporations
for the year 2012

6. BP is a British multinational
oil and gas company headquartered
in London, United Kingdom. It is the
third-largest energy company
and fourth-largest company in the
world measured by 2011 revenues
and is one of the six oil and gas
"supermajors“.
It is vertically integrated and
operates in all areas of the oil and
gas industry including exploration
& production, refining ,distribution
marketing, petrochemicals, power
generation and trading. It also
has renewable energy activities
in bio fuels and wind power.

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..

9. Global oil major British Petroleum On February
21, 2011 announced a historic oil and gas
transformational partnership with India’s Reliance
Industries valued at $ 7.2 billion. As per the
agreement, the British oil firm would have a 30%
stake in 23 oil and gas production contracts that
Reliance operates in the country.
What is more, the two firms have also established
a 50:50 joint venture for both sourcing as well as
marketing of gas in the country.

10. 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 India's
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.

11. Carl-Henric Svanberg, Chairman of BP. The
firm would pay Reliance $ 7 .2 billion for the
interests to be acquired in the 23 production
sharing contracts. An additional $ 1.8 billion
could be paid based on exploration success
that results in development of commercial
discoveries. The total combined investment
could amount to $ 20 billion, the report
noted.

13. This transaction represents one of the
largest foreign direct investments into India.
The 23 oil and gas blocks cover an estimated
270,000 square kilometres, making this
partnership India’s largest private sector
holder of exploration acreage.