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16
June 2017
Reliance
Industries (RIL) and British energy major BP on Thursday annnouced the creation
of a joint venture energy vertical to work across the entire value chain,
involving investment of $6 billion, or Rs 40,000 crore.
This
would also develop their existing deep water gas fields in India's eastern
offshore to bring to fresh production 1 billion cubic feet per day of natural
gas by 2022. The Total Investment &
Insurance Solutions
"We
will invest Rs 40,000 crore over many years as new investment to bring in 30-35
million cubic metres of gas in next three-to-five years and sustain it over
seven-to-eight years," Reliance Industries Chairman Mukesh Ambani said at
a press briefing here. The Total
Investment & Insurance Solutions
The
"solid relationship between our two companies is a great example of what
can be achieved while working together at scale", he added. The Total Investment & Insurance
Solutions
Ambani
said RIL was investing together with its eastern offshore KG basin gas fields'
consortium partner BP after a gap of 6 years. The Total Investment & Insurance Solutions
The
first project of the tie-up is to develop already discovered R-series gas
fields in Block KGD6, approximately 70 km off India's east coast. A dry gas
development project in water-depths of more than 2,000 metres, the project is
expected to produce up to 12 million cubic metres of gas a day after going
on-stream in 2020.
"India
holds great promise for future," BP CEO Bob Dudley said, adding that
tie-up was an important step for BP in India. The Total Investment & Insurance Solutions
"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," he said. The Total Investment & Insurance Solutions
BP
plans to submit development plans for the next two projects for government
approval before the end of 2017. Development of the three projects is expected
to bring a total 30-35 million cubic metres of gas a day onstream, phased over
2020-2022. The Total Investment
& Insurance Solutions
India
consumes over 5 billion cubic feet (141.5 million cubic metres) a day of
natural gas.
Earlier,
Dudley met Prime Minister Narendra Modi.
Apart
from the three projects, the two companies have also agreed for strategic
cooperation, under which they will jointly explore options to develop
differentiated fuels, mobility and advanced low carbon energy businesses in
India, Ambani said. The Total
Investment & Insurance Solutions
BP had
entered into a partnership with RIL in 2011 with a 30 per cent stake in
multiple oil and gas blocks operated by RIL in India, including KGD6. Since
then, the two companies have invested over Rs 10,000 crore ($1.6 billion) in
deepwater exploration and production up to May 2017, according to information
given by RIL.
Queried
multiple times about their ongoing arbitration disputes with the Indian
government, the consortium said that it were the change in policies made by the
current NDA government that had guided this investment decision designed to
meet the energy needs of the Indian consumer, which effort would then be
upscaled at a global level.
"We
still have some pending arbitrations and we hope to follow this legal process
to conclude these within the framework of the law," Ambani said, referring
to the arbitrations cases on shortfall in KG-D6 targeted gas output and on
alleged seepage of gas from contiguous fields of state-run ONGC. The Total Investment & Insurance
Solutions
"We're
pretty sure of a fair outcome of these proceedings, and which will not come in
the way of future investments. Because you have arbitration, you don't stop all
businesses," he added.
Dudley
pointed out that a lot of such arbitration issues crop up around the world,
which are then resolved. He said the change in government policies over the
last few years had chiefly guided this major investment decision and also
expressed satisfaction over the pricing policy for domestic natural gas for
producing from difficult deep sea areas.The
Total Investment & Insurance Solutions
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