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BP CEO Sees RIL Gas Block Output Rising From 2014

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[BP expects output from Reliance Industries' gas blocks off India's east coast to rise from 2014, and is working for approvals from the government to develop satellite fields, the British group's chief executive said on Wednesday. Reliance, controlled by India's richest man Mukesh Ambani, has been under fire in recent months from the regulator, investors and analysts over slowing gas output from the Krishna Godavari (KG) D6 block. BP acquired a 30 per cent stake in 23 oil and gas blocks from Reliance earlier this year, in a deal worth $7.2 billion, and the collaboration is expected to boost gas output in the energy-hungry nation, given BP's expertise in deep water exploration. "We are hopeful to get these approvals this year so we can begin engineering and by 2014 get gas production rising again," BP CEO Bob Dudley told reporters after meeting government officials. He is on a two-day visit to India. Earlier this month, India's upstream regulator said Reliance was currently producing 44 mscmd (million standard cubic metres a day) of gas from the D6 block, down from 60 mscmd a year earlier and far off the planned peak capacity of 80 mscmd. The CAG has also criticised Reliance and the government over development of the KG blocks and called for revamping profit sharing arrangements from oil and gas blocks. "We already have joint teams in place looking at options to increase production from the D6 block. I am confident that we will be able to increase activitiy and output from these efforts sooner rather than later," Dudley said. The two firms are also evaluating the potential to add production from other blocks such as NEC 25, situated north of the KG basin, and part of the Reliance-BP deal, he said. BP, Europe's second-largest oil company by market value, has been pushing into emerging markets such as India, since a major spill last year from its deepwater Macondo well in the Gulf of Mexico forced the United States to ban drilling in the area for part of the year. Reliance Chairman Mukesh Ambani, who accompanied Dudley, said the partnership with BP would not be limited to India, but was initially focusing only on opportunities in the country. The two companies plan to set up a gas marketing joint venture in the next couple of months. At 1:23 p.m. (0753 GMT), shares in Reliance, India's largest listed firm valued by the market at $52.8 billion), were trading 0.5 per cent higher in a weak Mumbai bourse. The stock has lost a quarter of its value so far this year, largely due to drop in gas output. BP shares were up 0.2 per cent in London. (Reuters)