The clearance of the $7.2 billion British Petroleum (BP) proposal to acquire 30 per

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cent stake in 23 oil and gas blocks under Reliance Industries (RIL) ambit including gas-rich Krishna-Godavri D6 blocks may get delayed further as oil ministry is likely to send it for the approval of cabinet committee on economic affairs (CCEA).

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“Seeking CCEA green signal for the deal is under-consideration after home ministry has raised few concerns related to marketing of gas that could be impacted if the deal sails through,” a senior oil ministry official, who didn’t want to be quoted said on Monday.

The all-cash deal announced in February by BP-RIL is one of the largest foreign direct investment deals in the oil sector in emerging markets.

“The decision whether the deal would be send to CCEA or not would be taken at the highest level in the oil ministry. The concerns flagged by home ministry in its reply are crucial and may impact state-run companies such as Gail (India),” the official said.

The home ministry has given its ‘security no-objection’ nod. But at the same time, flagged issues such as whether the new exploration licensing policy (Nelp) regime, under which oil blocks are auctioned, allows this kind of a farming-in agreement. Moreover, it is not clear whether BP should be allowed to take gas out of the country. The RIL-BP deal envisages the setting up of a gas distribution network that would market gas both in India and overseas.

Marketing of gas is regulated in the country. And there are concerns that entry of foreign players such as BP may create roadblocks in distribution of gas to indigenous industries, the home ministry has noted. Last month, RIL wrote to oil ministry to ‘expedite approvals’ for the proposed deal.

The official said the oil ministry will decide in a couple of weeks whether the deal should be referred to CCEA.

Last week CCEA gave conditional approval for the stake sale between UK-based Cairn Energy PLC and London-based Vedanta Resources in Cairn India after the oil ministry had referred the proposal about six months back.

Mukesh Ambani, chairman of RIL during the company’s last annual general meeting last month said, “It will take atleast three weeks for us to get the government approval for the BP deal. We will take a complex technical study post approval to bring back the long-term production, which would help us create value from the fields. The deal with BP is transformational in nature.”

RIL partnering BP is seen as a technological boost for exploiting ultra-deep water blocks in India. RIL also expected to address the dip in natural gas output from country’s most prolific KG D6 block with the help of UK’s energy giant.