BP chief pitches for 'appropriate' pricing for gas projects

Pitching for an "appropriate" pricing of natural gas for capital intensive deepsea projects like KG-D6, BP chief executive Bob Dubley met Prime Minister Narendra Modi, the first since the BJP-led government stormed to power last May.
Unlike past when he was accompanied by Mukesh Ambani, head of Reliance Industries -- BP's partner in India, Dudley met Modi yesterday alongwith his India head Sashi Mukundan.
"Yesterday, Bob Dudley met Prime Minister and today he met me. He promised greater engagement in oil and gas sector," Petroleum Minister Dharmendra Pradhan said at an industry event here.
Dudley, who had met Pradhan on sidelines of the World Petroleum Congress in Moscow in June last year, assured of "oil and gas production increasing" and greater engagement, the minister said.

He however did not elaborate on discussions.
Dudley, who was in the national capital to meet senior leadership in the government and review progress of BP's business and future plans in India, said "opportunities and challenges" were discussed during the meetings.

"We discussed opportunities and challenges in the Indian energy sector at large and also specific to our deep water exploration and development projects," he said.
Stating that he saw potential for "significant additional investments and creation of jobs in the sector," he said "for complex and capital intensive deep water projects, appropriate pricing is critical for viability."
Dudley however did not elaborate on what he meant by appropriate pricing.

BP, which had in 2011 bought 30 per cent stake in Reliance Industries' 21 oil and gas blocks including KG-D6 for USD 7.2 billion, is working on reviving the sagging output from eastern offshore KG-D6 fields.
But most of the companies have been unhappy at the new gas pricing formula fixed by the BJP-government in October last year.
The price of domestic gas as per the new formulation is USD 4.66 per million British thermal unit, about half of the rate available to operators in neighbouring markets like Myanmar, China and Thailand.
The industry has also been seeking an early decision on the premium that the government promised to give for future gas discoveries.

BP since coming on board in 2011 has been working to revive the output at KG-D6 field which currently at less than 13 million standard cubic meters per day is one-fifth of levels achieved three years back.
Investment approvals for developing satellite and other discoveries in KG-D6 block as well as other areas like NEC-25 have been pending because of low gas price.
BP, India's single largest foreign investor, and its partner RIL had last year slapped an arbitration notice on the government for delay in approval of a formula cleared by the previous government that would have doubled gas rates to USD 8.4.