BP's Dudley, RIL's Ambani meet PM, seek market-driven gas price

Bob Dudley and Mukesh Ambani Reliance Industries Ltd chairman Mukesh Ambani and Bob Dudley, chief executive officer of BP Plc, RIL's partner in the Krishna-Godavari gas basin, on Monday met Prime Minister Manmohan Singh and top officials seeking a clear roadmap for steering towards market-driven pricing of natural gas, as the current sub-market rates were deterring big investments.

Dudley, on his second visit to India in as many months, and Ambani also met Planning Commission deputy chairman Montek Singh Ahluwalia and sought a meeting with law minister Ashwini Kumar, two key members of a panel on gas pricing and allocation.

Dudley, who made a day-long stop in Delhi on his way to Shanghai, pressed for clarity on the new pricing of natural gas after the expiry of the $4.2-per million British thermal unit rate a year from now.

"They are very concerned, they are very keen that government take a view (soon). That process is under way. I wasn't able to tell him what we are going to decide," Ahluwalia told reporters. "I did say that there is an empowered group of ministers and it will be considering the C Rangarajan committee (recommendations)."

Dudley, who also met oil secretary Vivek Rae, briefed the prime minister and others about the investments BP and RIL plan to make in quickly putting satellite gas fields in the flagging KG-D6 block, as also bringing discoveries in eastern offshore NEC-25 block to production.

"We are the largest investor in India. We have come to review progress of plans," he said, adding that BP was "very pleased" with the events that allowed the firm to drill an exploration well on the currently producing fields in KG-D6 block well after the expiry of exploration phase.

Dudley said there may be "promising indications of resources" in the well drilled 2 km below the currently producing Dhirubhai-1 & 3 fields and BP-RIL were also "discussing plans for R-Series satellite development."

BP and RIL hold that the C Rangarajan Committee recommendation of doubling domestic natural gas price to $8-8.5 per mmBtu will be inadequate for bringing high risk deep sea discoveries to production.

A panel headed by Rangarajan, chairman of the Prime Minister's Economic Advisory Council, observed that the current price for domestic gas was out of sync with global rates and suggested an interim "hybrid producer price" derived by averaging international hub prices with cost of imported liquid gas (LNG) for next five years.