When BP chief executive Bob Dudley visited India last October, he had just taken over the reins of the company that was in distress due to the oil spill in the Gulf of Mexico. The situation is a bit different now: the outrage over the spill has subsided, but its new partner in India, Reliance Industries (RIL), is in some distress.
An adverse Comptroller and Auditor General report and low production from its flagship D6 gas field have kept RIL on its toes lately. The companies had exchanged data on the field, but joint teams were yet to start work, said an RIL executive. The real action is expected to begin once the paper work on transfer of 30 per cent RIL interest in the field is completed.
Dudley will meet RIL chairman Mukesh Ambani here tomorrow. Dudley and P M S Prasad, director and in-charge of RIL’s petroleum business, will go to Kakinada, the landfall point of D6 gas, in Andhra Pradesh. Dudley will skip a visit to the offshore platform, though his company’s spokesperson did not share details of his itinerary, citing confidentiality. RIL spokesperson also did not comment.
Dudley had earlier this month told investors in New York there were no quick fixes to the company’s problems. He said he would focus on long-term goals, despite pressure from investors to quickly address a flagging share price.
Though some analysts and investors have asked BP to break the company, by spinning off US assets into an independent company and selling North Sea and Russian interests, the company has been following a different strategy. Dudley said he was eyeing “a range of options to restore the value we have lost in the past year”. One such pick was buying a 30 per cent participating interest in RIL’s 23 oil and gas blocks through a $7.2-billion deal.
The two firms are also in the process of floating a joint venture for natural gas marketing and transportation, including setting up of liquefied natural gas terminals, but it’s not clear why should they float a new venture when Ambani-owned Reliance Gas Transportation India Ltd (RGTIL) is already into the same business. RIL executives said details of the proposed venture were being worked out and the work of RGTIL and the new company might not clash.
With government approvals in place for 22 blocks, Dudley is expected to pay courtesy call on Prime Minister Manmohan Singh and petroleum minister Jaipal Reddy.
