Reliance Industries and BP will invest R $ 40 billion to produce between 30 and 35 million cubic meters per day of gas from new fields in the Krishna-Godavari basin, RILBSE president -0.88% Mukesh Ambani and BP's CEO Bob Dudley, Strengthen a long-standing relationship.
The big announcement follows increasing comfort with the policy and price regime for natural gas after prolonged acrimony during the previous government that stopped investment in one of the most promising oil and gas basins.
BP and RIL also announced a strategic alliance for initiatives in the transportation and retailing of aviation fuel and a major push to jointly tap global opportunities in the low-carbon energy domain, including transportation and renewable energy. Innovation to the world market.
The two contract award plans to develop the R-series deepwater field are expected to produce up to 12 million cubic meters of gas per day from 2020. The companies plan to submit a development plan for two more projects to The end of 2017. Together, the three fields are expected to produce between 30 and 35 million cubic meters of gas per day by 2022.
"We have seen in the last two years the change in policies and support that has given us confidence with Reliance to make this investment very meaningful," Dudley said. "We have rethought our global investments to include these projects."
Last year's government allowed operators to seek higher prices for gas produced in deepwater fields. But Reliance and BP will have to withdraw arbitration related to the gas price against the government to benefit from this policy.
Reliance and BP are locked in multiple arbitration cases with the government.
"We are pretty sure that we will get a fair result (in arbitration). We do not believe this will go the way of our future investments," Ambani said, without clarifying whether companies were considering withdrawing arbitrage the gas.
As the world continues to focus on climate change, policies that support free-market natural gas prices would benefit the industry and reduce India's dependence on gas imports, Dudley said. Incentives to combine renewable energy with gas as a link fuel would create another opportunity, he said.
Reliance and BP are expected to collaborate in the transport and retail business of jet fuel. Reliance already operates in both segments dominated by state oil companies. BP has also obtained licenses to run gasoline pumps and the aviation fuel business, but has not yet started.
The two companies also plan to jointly explore options for developing differentiated fuels and unconventional mobility solutions. Ambani said the details of these issues will be shared over the next few months and years, but the intent would be to involve the best universities and minds from around the world and start experiments to find solutions that benefit the world.
Six years ago, Ambani and Dudley signed a $ 7.2 billion deal to sell a 30 percent stake in 23 hydrocarbon blocks, including those in the KG basin.