BP, RIL to invest US$6 bn for new gas field developments in India
One of the world’s leading integrated oil and gas companies, BP, and India’s largest private sector company Reliance Industries Limited (RIL) are expanding their partnership with a US$6 billion investment for the development of already-discovered deepwater gas fields in India. The two companies have also agreed to work jointly across a wide range of areas throughout India’s energy sector.
Developing Block KGD6 ‘R-series’ gas fields
RIL and BP announced that they will award contracts to progress 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 meters, approximately 70 kilometers offshore. The R-series fields will be developed 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 meters (425 million cubic feet) of gas a day, coming on stream in 2020.
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 Rs400 billion (US$6 billion), is expected to bring a total 30-35 million cubic meters (1 billion cubic feet) of gas a day new domestic gas production on-stream, phased over 2020-2022.
Mukesh Ambani, Chairman and Managing Director of RIL, said: “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.”
Speaking in New Delhi on June 15, 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.”
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% of the country’s projected gas demand in 2022; benefiting India and domestic consumers at large.
Execution of the R-Series and following projects will require deployment of advanced skills, processes and technologies through the combined partnership of RIL and BP 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.
Deepening partnership in India’s energy sector
RIL and BP will 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 world.
The companies expect to collaborate, in addition to the conventional transportation and aviation fuels retailing, on unconventional mobility solutions, addressing electrification, digitization 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.”
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.
With a population of 1.3 billion, India is a rapidly growing market consuming around 4 million barrels a day of oil products. The country’s demand for fuels is also expected to grow by 5-7% per year over the next decade.