BP & Reliance to invest $ 6 bn to develop deepwater gas fields in KG basin

This is the first of three planned projects in Block KGD6 that are expected to be developed in an integrated manner, producing from about 3 trillion cubic feet of discovered gas resources. RIL and BP plan to submit development plans for the next two projects for Government approval before the end of 2017. Development of the three projects, with total investment of Rs 40,000 crore ($6 billion), is expected to bring a total 30-35 million cubic metres (1 billion cubic feet) of gas a day new domestic gas production onstream, phased over 2020-2022.

“We are delighted to progress these developments, which will provide India with much needed indigenous energy and support the Prime Minister’s call for import substitution and the development of a gas-based economy. The solid relationship between our two companies is a great example of what can be achieved while working together at scale,” said Mukesh Ambani, chairman and managing director of RIL.

Bob Dudley, BP group chief executive, added, “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. It is testament to our commitment to working in partnership with Reliance and with the Government to produce more energy in India, for India”.

India today consumes over 5 billion cubic feet a day of natural gas and aspires to double gas consumption by 2022. Gas production from the integrated development is expected to help reduce India’s import dependence and amount to over 10 percent of the country’s projected gas demand in 2022; benefiting India and domestic consumers at large.

In an historic partnership with Reliance Industries in 2011, BP took a 30 percent stake in multiple oil and gas blocks in India operated by RIL, including the producing Block KGD6. Since formation of this partnership, the two companies have invested over Rs 10,000 crore ($1.6 billion) in deepwater exploration and production in the period to May 2017.

RIL and BP have also signed an agreement to jointly explore options for developing differentiated fuels, mobility and advanced low carbon energy businesses in India, as the country transitions to a low-carbon world.

The companies expect to collaborate, in addition to the conventional transportation and aviation fuels retailing, on unconventional mobility solutions, addressing electrification, digitisation and disruptive mobility trends. 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.

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.”

India is a rapidly growing market with a population of 1.3 billion people, consuming around 4 million barrels a day of oil products and with demand for fuels expected to grow by 5-7 percent per year over the next decade. BP and RIL are committed to being one of India’s preferred energy partners now and in the future.

Bob Dudley added, “India’s demand for both energy and mobility is growing and evolving rapidly. This presents many opportunities for BP and Reliance to build on our existing strong relationship in upstream and expand our partnership further downstream. Combining skills and experience from both our companies, we expect to cooperate on mobility and advanced low carbon solutions and jointly explore other opportunities throughout India’s energy sector.