BP cites ‘bright future’ with Reliance Industries; looks to develop gas markets in India

CEO of London based energy major British Petroleum (BP Plc), Bob Dudley has expressed optimistic views on the much acclaimed alliance between BP and Mukesh Ambani-led Reliance Industries Limited (RIL). The CEO of world’s leading ‘petro-technical’ company noted that the alliance with Reliance is likely to render fruitful results and there is a great future working in close association with the Indian energy giant.

Bob Dudley, on his two day visit to India, noted that being able to combine the strengths of RIL in project development and management with BP’s petro-technical skills, the reservoir skills and the exploration skills, will ascertain beneficiary results for both partners and leverage the alliance’s plans to develop gas markets in India.

The partnership between RIL and BP will see BP taking a 30 per cent stake in 23 oil and gas production sharing contracts (PSC) that RIL operates in India, including the much acclaimed KG – D6 block off the east coast of Andhra Pradesh, and the formation of a 50:50 joint venture between the two companies for the sourcing and marketing of gas in India. The JV will also look to amp up the process of formation of infrastructure for receiving, transporting and marketing of natural gas in India. Lately, KG-D6 has seen its output decline gradually to less than 45 mmscmd instead of rising to 80 mmscmd as anticipated in the field’s assessment. There are a few technical issues, which RIL is currently sorting with the assistance of its partner BP Plc. Dudley assured that BP and RIL are working with the government to get additional satellites and the R series reservoirs approved. He is hopeful that the JV will get these approvals within the year so as to begin the process of engineering and, by 2014, get the production of gas rising from KG-D6.

Stating that “free market system is what any economy needs to be able to ensure efficient development of its resources”, Dudley noted that deep sea exploration is a capital intensive, high risk process that needs to be developed in order to reap maximum rewards from the risks.

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