• Road to riches

    Taxpayers keep funding structures with big plans but who knows what efficacy, says Mandi Smallhorne.

  • Don't fall for Ponzi scams

    An expert unpacks the tell-tale signs to watch out for.

  • Inside Labour

    A smokescreen of misleading rhetoric won't make SA's problems go away, says Terry Bell.

See More

BP, Reliance plan $5bn India deal

Feb 19 2013 18:09 AFP

Related Articles

India's richest man faces luxury home probe

BP's 2012 net profits drop drastically

BP to be simpler, oilier as capex rises

BP to restructure oil production units

BP to pay record fine for spill - source

BP sells stake in North Sea gas field


New Delhi - BP and Reliance Industries on Tuesday announced plans to invest over $5bn to reverse a decline in output from India's biggest natural gas reservoir in the Bay of Bengal.

The energy partners, who tied up two years ago, said they would jointly invest in a string of projects to develop four trillion cubic feet of gas resources from the D6 block in the Krishna-Godavari basin to supply energy-hungry India.

At current prices, it would cost more than $50bn to import this volume of gas into India, BP, already India's largest single British investor, and Reliance, India's largest private company, said in a statement.

"The partnership is focused on finding more hydrocarbons and addressing the complexities of the geology along the east coast of India," Reliance's billionaire chief Mukesh Ambani said in a statement.

The announcement came as British Prime Minister David Cameron was in New Delhi on the second-day of a trade-focused official visit during which he declared Britain wanted to be India's trade "partner of choice".

"The decision to join forces with Reliance Industries to invest $5 billion in the next few years in India's gas markets reinforces how two of Britain and India's leading companies can work together," Cameron said.

The firms hope to "significantly contribute to India's domestic production and help the country attain energy security", Ambani said.

In 2011, BP, seeking to benefit from access to new hydrocarbon resources and markets, agreed to buy a 30% stake in 23 of Reliance's oil and gas blocks, including KG-D6, for $7.2bn.

Reliance teamed up with BP in the hope its deepwater drilling expertise would raise output from KG-D6 that has slumped sharply due to geological complexities and left India more dependent on costly imported liquefied natural gas.

"This plan, when implemented, would entail a potential total investment in excess of $5bn over the next three to five years," the two companies said, referring to the KG-D6 gas field.

Gas from these projects "will deliver energy to millions of Indians and would significantly help India in reducing its import dependence", India's petroleum minister Veerappa Moily said.

Greater fuel access for India has become especially vital given turmoil in the energy-rich Middle East and north Africa and the need to reduce a record current account deficit of which fuel imports account for the largest chunk.

Reliance and BP have since formed a 50:50 joint venture to source and market gas in India called India Gas Solutions Private Ltd.

"We will bring all our expertise in deep water to explore the prolific gas basins in India," said BP's Bob Dudley, who was part of what Cameron called the biggest-ever British overseas trade delegation.

Moily promised to "fast-track" India's notoriously slow government approval process so that BP and Reliance could start stepping up development.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

bp  |  india  |  oil and gas



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

People who fall victim to Ponzi scams are:

Previous results · Suggest a vote