Apropos the report "BP writes down $770-mn of KG block value" (October 29), it seems that BP has related the write-down of its 30 per cent stake in Reliance Industries' (RIL) KG-D6 block to the new gas price formula announced by the government. One wonders if this is a full disclosure of reasons for this write-down, particularly in the context of the shale-based oil and gas boom and a steep fall in oil prices.
When BP invested in RIL's assets, there was no Rangarajan Committee recommendation. On the other hand, there was already a dispute about both the declining potential of the fields and the gold-plating allegations, the government's share and applicability of a revised price based on fulfilment of initial commitment or expiry of time. On the contrary, there was an expectation that BP's expertise in complex deep-sea fields would improve recovery from and enhance the value of these fields. One wonders if this could be the situation where BP had made over-optimistic projections when they agreed on the transaction.
P Datta Kolkata
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