Under the terms of the ISDA signed by the two companies, BP can now participate in IOC's monthly derivatives tendering process for paper contracts on crude oil and other petroleum products. And, according to an unnamed BP spokesperson, this deal will benefit the energy giant as "India's largest refiner and retailer - IOC - is planning to issue a derivative tender sometime later this month."

IOC plans to use the derivative transactions to reduce its exposure to the extremely fluctuating world oil prices. However, the company has to operate under rules and regulations stipulated by the Reserve Bank of India.