BP and Reliance Industries announced plans to invest over $5 billion to reverse declining output from India’s biggest natural gas reservoir in the Bay of Bengal.The energy partners, who tied up two years ago, said they would jointly invest in a string of projects to develop four trillion cubic feet of gas resources from the D6 block in the Krishna-Godavari basin to supply energy-hungry India.
At current international liquefied natural gas (LNG) prices, it would cost more than $50 billion to import this volume of gas into India.
In 2011, BP, seeking to benefit from access to new hydrocarbon resources and markets, bought a 30 per cent stake in 23 of Reliance’s oil and gas blocks, including KG-D6, for $7.2 billion.
Reliance teamed up with BP hoping its deepwater drilling expertise would raise output from KG-D6 that has slumped sharply due to geological complexities and left India more dependent on costly imported liquefied natural gas.
Leading the largest-ever trade delegation from the UK to any country, British Prime Minister David Cameron said: “BP is already the largest single British investor in India and the decision to join forces with Reliance Industries to invest $5 billion in the next few years into India’s gas markets reinforces how two of Britain’s and India’s leading companies can work together to invest in and supply the energy needs of the future, creating jobs and boosting prosperity.”
“Gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence,” said Veerappa Moily, Minister of Petroleum and Natural Gas, India.
With its many investments in India and employing over 8,500 people in the oil, gas, lubricants and petrochemicals businesses, BP is today the largest international oil company in India.
