Mukesh Ambani, BP CEO Bob Dudley meet Oil Minister Dharmendra Pradhan
Mukesh Ambani, India's richest man, and his British partner Bob Dudley of BP today came calling on the government as they looked to revive investments in deep-sea gas exploration and production after an eight-year hiatus
New Delhi: Mukesh Ambani, India's richest man, and his British partner Bob Dudley of BP today came calling on the government as they looked to revive investments in deep-sea gas exploration and production after an eight-year hiatus.
Dudley, whose last visit in January 2015 led to India revisiting the natural gas pricing formula and a higher rate for gas produced from deep-sea and difficult areas, met Oil Minister Dharmendra Pradhan this afternoon. He was accompanied by BP India head Sashi Mukundan during the meeting. 45 minutes into the meeting, Ambani joined them.
Both refused comment after the 80-minute meeting. Ambani and Dudley would meet Prime Minister Narendra Modi before making a media announcement about reviving investments in exploration and production.
While the cap price for natural gas RIL-BP produce from the existing flagging fields in the KG-D6 block is capped at USD 2.48 per million British thermal unit, the rate gas from newer fields in the deepsea block would fetch USD 5.56 per mmBtu - a price considered attractive enough for reviving the investment cycle.
The duo have Satellite, R-Series and D-55 discoveries in the KG-D6 block which they plan to start producing from 2021 or 2022.
RIL-BP currently produce gas from Dhirubhai-1 and 3 field and oil and gas from MA field, three of the over one-and-half dozen discoveries made in KG-D6 block.
The fields, which began gas production in April 2009, hit a peak output of 69.43 million standard cubic meters per day in March 2010 before water and sand ingress shut down well after well. The block currently produces around 8.7 mmscmd.
Sources said work for developing R-Series and satellite discoveries has begun and a fresh investment plan would be formulated by the end of the year for development of R-Cluster fields in KG-D6 block.
A field development plan (FDP) approved in August 2013 envisaged USD 3.18 billion investment in R-Series or D-34 gas field to produce 13-15 mmscmd of gas for 13 years. RIL-BP recently submitted FDP for two other discoveries D-29 and 30, which formed part of R-Cluster.
Besides, another FDP of USD 1.529 billion for four satellite gas discoveries ¿ D-2, 6, 19 and 22, was approved in 2012. The four fields can produce 10.36 mmscmd. Both of these productions were to originally start by 2017 but unfavourable business environment and low gas prices led to the two partners pushing back the investments.
A new FDP would be presented to the regulator, DGH for the fields, sources said adding the two partners have also submitted a FDP of D-55 or MJ find. They said it will take 36-42 months to build and install new facilities on these fields and to drill new wells and hook them up.
Also, they have over half a dozen discoveries in block NEC-25, off the Odisha cast. D32 discovery in the block was recently declared commercial.
However, development of the gas fields would be contigent on resolution of arbitration cases. RIL is locked in four arbitration cases with the government. It is in arbitration against the government disallowing recovery of certain KG-D6 gas field costs as a punishment for gas output lagging targets.
Another arbitration is over deferring of a natural gas price hike due to the company from April 1, 2014. The latest arbitration is against government demanding USD 1.55 billion compensation from RIL and its partners for "unfairly" producing ONGC's gas.