A “historic” alliance between Britain’s BP and India’s Reliance Industries has been approved by the Indian Cabinet, according to the British oil company.First announced in February 2011, the proposed $7.2billion deal set up BP to take a 30 per cent stake in 23 oil and gas production blocks that Reliance operates in India.

The Cabinet has now given the go ahead on 21 blocks, with permission to extend the deal to the remaining two blocks waiting on a nod from the India’s Ministry of Petroleum & Natural Gas.

BP’s Chief Executive Bob Dudley said: “We welcome the Indian Government’s approval for our alliance with Reliance Industries, partnering with India in its quest for energy security. This transaction is part of BP’s strategy of creating long-term value through alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets.”

He said the companies are working on commercial agreements for the deal in the next few weeks.