Reform gas price regime: BP chief Dudley

I'm hopeful that the new government will move the price up. It's very important, or the entire offshore industry in India is at risk: Bob Dudley

 

Bob Dudley, CEO of BP, wants the new Indian government to reform its gas price regime for the survival of the gas industry.

Speaking at the World Petroleum Congress in Moscow on Monday, Dudley said that the company's experience had been “disappointing”.

“It has been disappointing, the pace at which certain things have been approved — the price rising up towards a market price, there has been a number of delays in seabed surveys and the appraisals of various projects,” global energy information provider Platts quoted Dudley as saying.  

“You just have to look at the natural gas prices around the world. It seems not right that it would be more economic to produce gas in Australia and sell it into India at $20 per million cubic feet, than be able to develop the resources in India,” he added.

In 2011, BP had made a $7-billion investment in Reliance Industries to help the company explore and develop deep-water fields offshore eastern India. Last month, Reliance Industries along with BP and Niko Resources issued a notice of arbitration to the Government of India, seeking the implementation of the 'Domestic Natural Gas Pricing Guideline 2014' notified on January 10, 2014.

The companies said that without clarity, they are unable to sanction planned investments of close to $4 billion this year.

This will also delay the ability of the partners to appraise and develop their significant discoveries made last year. Overall, the parties were planning to invest $8-10 billion in the next few years to significantly increase production from the KG D6 block.

“I'm hopeful that the new government will move the price up. It's very important, or the entire offshore industry in India is at risk. I'm hopeful that the new government will move the price up. It's actually essential to preserve that industry," Dudley noted.