BP could further pay USD 1.8 billion "on exploration success that results in development of commercial discoveries," RIL said in a press statement.
The two firms will also enter into a 50:50 joint venture for sourcing and marketing of gas.
BP CEO Bob Dudley and RIL Chairman and Managing Director Mukesh Ambani will make a joint announcement later in the evening.
BP's combined investment including payments to Reliance could amount to USD 20 billion. Ambani and Dudle "signed the relationship framework and transactional agreements in London," the statement said.
"The partnership across the full value chain comprises BP taking a 30 per cent stake in 23 oil and gas production sharing contracts that Reliance operates in India.
This includes producing KG D6 block, and the formation of a 50:50 joint venture between the two companies for the sourcing and marketing of gas in India," it said.
The joint venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas in India.
Reliance said the partnership will combine BP's world class deepwater exploration and development capabilities with Reliance's project management and operations expertise.
"This partnership meets BP's strategy of forming alliances with strong national partners, taking material positions in significant hydrocarbon basins and increasing our exposure to growing energy markets," said Carl-Henric Svanberg, Chairman of BP.
The 23 oil and gas blocks together cover approximately 270,000 square kilometres. Reliance will continue to be operator of the blocks.
BP's shares were up 0.3 percent at 494.4 pence at 1108 GMT. Reliance Industries shares were up 2 percent.