BP PLC said Thursday it is pushing ahead with long-delayed efforts to develop natural gas offshore India, partnering with Reliance Industries Ltd.to plow $6 billion more into the first big investment it made following the Deepwater Horizon disaster. The investments will be over the next three to five years.
BP holds a 30 per cent stake in the gas block while Reliance holds 60 per cent, and the two have invested around $1.6bn to May this year in deep-water exploration and production.
After eight years, Reliance and BP have chose to invest in the D6 block on the east coast to raise gas output by 30-35 million cubic meters a day between 2020 and 2022. Dudley said: "Changed (government) policies have allowed us to develop new resources". But output from the D6 block, expected to contribute up to a quarter of India's gas supply, has been falling since April 2010. However, Ambani said the two companies don't expect these affecting fresh investments.
Asked about four arbitrations that RIL and BP have initiated against the government including one to get higher gas price, Ambani said the partners were "pretty sure" that they will get "a fair outcome". He clarified that despite being in arbitration case with state-run ONGC, both companies have an ongoing business and RIL is open for further business with the national oil company.
According to Ambani, the new partnership will look at developing differentiated fuels and also work towards carbon emissions trading.
"Together, these collaborations will seek to address the mobility needs of urban, rural/farm, industrial/commercial and highway consumers in India, applying the leading capabilities of both partners". "We will be working with universities across the world and various pilots will be done".
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Mukesh Ambani commented: "This strategic partnership not only strengthens the relationship between two global energy leaders, but is also in line with and supports the forward-looking policies and vision of the Government of India". The previous government claimed that the lower production was intentional.
BP and RIL will enhance their partnership to develop new products to help India's mobility market.
The joint partnership will also be exploring the retail fuel business in India. The company's activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and 4G digital services. RIL at present has 1,244 retails outlets.
RIL's two refineries have a combined capacity of around 62 mtpa. He described the oil market as a struggle between shale and sheikhs and expects oil to trade between $50 and $55/barrel next year.
"We don't see pending arbitration hampering our new investments".