BP, RIL to expand partnership, invest Rs40,000 cr in KG gas fields
16 June 2017
Reliance Industries Limited (RIL) and BP on Thursday announced plans to invest Rd40,000 crore in India's energy sector as the two expand partnership downstream and in other areas, including development of already-discovered deepwater gas fields.
The two companies have agreed to deepen and expand their partnership to work jointly across a wide range of areas throughout India's energy sector.
RIL and BP will initially award contracts for development of the 'R-Series' deep water gas fields in Block KGD6 off the east coast of India. The R-series (D34) project is a dry gas development in water-depths of more than 2,000 metres, approximately 70 km offshore.
The companies plan to develop the R-series fields as a subsea tieback to the existing control and riser platform off Block KGD6. The project is expected to produce up to 12 million cubic metres (425 million cubic feet) of gas a day, coming on stream in 2020.
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 Rs40,000 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.
The KGD6 block with 3 trillion cubic feet of discovered gas resources is are expected to be developed in an integrated manner, the two companies stated.
''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.
Speaking in New Delhi, Bob Dudley, BP group chief executive, welcomed the investment: ''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''.
With daily consumption of over 5 billion cubic feet a day of natural gas, which is expected to double by 2022, gas production from the integrated development is expected to help reduce India's import dependence, contributing over 10 per cent of the country's projected gas demand in 2022.
RIL and BP said the companies will pool resources, including advanced skills, processes and technologies to develop and produce gas from these ultra-deep reservoirs.
The implementation of other two projects in Block KGD6 is subject to applicable regulatory and government approvals, they added.
Fuel retailing and beyond
RIL and BP plan to expand their existing partnership for strategic cooperation on new opportunities across India's energy sector. Under the agreement the two companies will jointly explore options to develop differentiated fuels, mobility and advanced low carbon energy businesses in India, as India transitions to a low-carbon economy.
Besides the conventional transportation and aviation fuels retailing, the two companies will collaborate on unconventional mobility solutions, addressing electrification, digitisation and disruptive mobility trends, especially the mobility needs of urban, rural/farm, industrial/commercial, and highway consumers in India.
''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,'' Mukesh Ambani commented.
''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,'' said Bob Dudley.
''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 per cent 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,'' he added.
BP, which formed an alliance with Relance Industries in 2011, currently holds a 30 per cent stake in multiple oil and gas blocks in India operated by RIL, including the producing Block KGD6.
RIL, as the operator, holds a participating interests of 60 per cent in KGD6 block while Niko Resources of Canada holds theremaining 10 per cent stake.