BP Plc (NYSE: BP) and India's Reliance Industries Ltd. will invest a further 400 billion rupees (US$6.2 billion) in their jointly owned KG D6 gas block off India's eastern coast, the heads of the two companies said June 15.
BP CEO Bob Dudley, appearing alongside Reliance Chairman Mukesh Ambani at a news event in New Delhi, said the new investment is expected to produce 30 million to 35 million cubic meters a day of gas, phased over 2020 to 2022.
"This is an important step forward for BP in India. Working closely together, Reliance and BP are now able to develop these major deepwater gas resources offshore India efficiently and economically," Dudley said.
In 2011, Reliance agreed to sell a stake in 23 of its oil and gas blocks to BP for $7.2 billion. But output from the D6 block, expected to contribute up to a quarter of India's gas supply, has been falling since April 2010.
Reliance holds a 60% stake in the gas block in the Krishna Godavari (KG) basin and BP owns 30%, while Calgary, Alberta-based Niko Resources Ltd. holds the rest. Reliance and BP have invested around $1.6 billion to May this year in deepwater E&P.
India, the world's third-largest oil importer, has said it will move gradually to a gas-based economy, and its demand is expected to grow rapidly as the country industrializes.
BP and Reliance also said June 15 that they would look to tap new opportunities in India, including developing "differentiated" fuels, trading carbon emissions and advanced low-carbon energies. (US$1 = 64.5950 Indian rupees)