After a meeting with Petroleum Minister Dharmendra Pradhan, the heads of the two companies, Global oil giant BP and Reliance Industries Ltd announced an investment of about Rs 40,000 crore ($6.2 billion) in their jointly owned KG D6 gas block situated off India’s eastern coast.
Bob Dudley, Chief Executive, BP at a media conference said, “ The new investment is expected to produce 30-35 million cubic meters of gas a day, phased over 2020 to 2022. And this is an important step forward for BP in India. Working closely together, Reliance and BP are now able to develop these major deep-water gas resources offshore India efficiently and economically.”
Mukesh Ambani, Chairman of Reliance Industries Ltd said, “The two firms have also agreed on a strategic cooperation on new opportunities for conventional and unconventional fuel trading and marketing including jointly setting up petrol pumps.”
A 60 per cent stake in the gas block in the Krishna Godavari (KG) basin is owned by Reliance and BP owns 30 per cent. Canadian company Niko Resources Ltd holds the remaining share. It is expected that the gas project will reduce the country’s import dependence by 10 per cent. Reliance and BP have invested around $1.6 billion till May this year in deep-water exploration and production.
Ambani said, “We don’t see pending arbitration hampering our new investments. RIL is locked in four arbitration cases with the government.” He also added that RIL will follow legal course for bringing them to conclusion.
Arbitration is against government demanding $1.55 billion compensation from RIL and its partners for unfairly producing ONGC’s gas.
Dharmendra Pradhan, Petroleum Minister invited BP and Reliance Industries to invest in fuel retailing during his meeting with the two company heads.
RIL already has a fuel retailing license and has some 1,400 petrol pumps on the ground. BP got approval to set up petrol pumps in India last year.