Published: Sun, June 18, 2017
Economy | By Melissa Porter

BP, India's Reliance to invest $6 bln more in offshore gasfield

BP, India's Reliance to invest $6 bln more in offshore gasfield

After an lull of eight years, Mukesh Ambani-led Reliance Industries, along with partner BP Plc., has chose to invest $6 billion in the controversial KG-D6 gas block to bring new gas to production even as earlier $9 billion of investments in the block saw production falling to over one-tenth of an anticipated 80 mmscmd (million metric standard cubic metres per day).

BP first partnered with RIL in 2011, spending $7.2 billion for a 30% stake in oil and gas fields operated by the Indian company.

The companies will award contracts for the development of the "R-Series" deepwater natural gas fields in Block KGD6 off eastern India, BP said in a 15 June press statement.

For this three projects, the duo will be making a total investment of Rs 40,000 crore ($6 billion) and is expected to bring a total 30-35 million cubic metres of gas a day new domestic gas production onstream, phased over 2020-2022.

"It's taken a while to develop a natural gas price to help develop these projects", BP CEO Bob Dudley told the industry CERAWeek conference in Houston in March. Reliance and BP have invested around $1.6 billion to May this year in deep-water exploration and production.India, the world's third-largest oil importer, has said it will move gradually to a gas-based economy, and its demand is expected to grow rapidly as the country industrialises. Combining skills and experience from both our companies, we expect to cooperate on mobility and advanced low carbon solutions and jointly explore other opportunities throughout India's energy sector, " said Bob Dudley.

Indian Business tycoon Mukesh Ambani's RIL who is already in the retail market has around 1,400 petrol pumps while BP was past year also given the approval to set up fuel stations in the country.

"BP & RIL have invested in KG Basin", Pradhan said in a tweet after the meeting. "But BP has made a decision to go with Reliance in retail market as well".

"We will jointly explore options to develop differentiated fuel and mobility". The latest arbitration is against government demanding Dollars 1.55 billion compensation from RIL and its partners for unfairly producing ONGC's gas.

"India has a lot of natural gas off the east coast".

The announcement played up the economic benefits in India where energy regulators have been talking about allowing market prices for gas from new developments, as part of the program to sharply reduce gas imports over the next 5 years, by encouraging Indian projects.

· BP in India: With many investments in India and employing around 7,500 people in the oil, gas, lubricants and petrochemicals businesses, BP is today the largest worldwide oil company in India. RIL already operates 1,400 pumps in India while BP has applied for a license.

The gas joint venture is marketing some of the LNG sourced from BP's portfolio. The International Energy Agency expects India to account for a quarter of global energy use by 2040.

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