RIL, BP to invest $5 billion to boost D6 gas field output

Tue Feb 19, 2013 7:04pm IST

Reliance Industries KG-D6's facility located in Andhra Pradesh is pictured in this undated handout photo. REUTERS/Reliance Industries/Handout

Reliance Industries KG-D6's facility located in Andhra Pradesh is pictured in this undated handout photo.

Credit: Reuters/Reliance Industries/Handout

Related Topics

Stocks

   

REUTERS - Reliance Industries(RELI.NS) and UK partner BP(BP.L) plan joint investment of more than $5 billion over the next three to five years to boost declining output at a key natural gas field off India's east coast.

The D6 block in the Krishna Godavari basin was expected to contribute up to a quarter of the gas supply for Asia's third-largest economy and help to reduce expensive liquefied natural gas (LNG) imports.

However, output from the field has been declining, putting the company under pressure from the government and regulators to increase production, even as it has pushed the government to increase the price it can charge for gas.

The two companies now plan to invest in a series of measures to develop about 4 trillion cubic feet of discovered natural gas from the block, Reliance said in a statement on Tuesday.

Reliance holds a 60 percent stake in the D6 block, while BP has a 30 percent share that it obtained in a $7.2 billion deal in 2011. The remainder is held by Canada's Niko Resources (NKO.TO).

By the end of 2012 fields in the D6 block had produced 2 trillion cubic feet of gas, according to Reliance, which is controlled by India's richest man, Mukesh Ambani. In November Reliance cut its estimate of gas reserves in the block by about two thirds to 3.4 trillion cubic feet.

BP and Reliance said on Tuesday that they would accelerate the pace of exploration and development as soon as approvals are received.

The companies have invested $5.5 billion in the field. A second planned investment of $3.3 billion was scrapped last year because of declining in production at some blocks in the field.

(Reporting by Prashant Mehra, Aradhana Aravindan and Sumeet Chatterjee; Editing by Tony Munroe and David Goodman)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Earnings Season

REUTERS SHOWCASE

Record Highs

Record Highs

BSE Sensex, Nifty hit record highs, insurers gain  Full Article 

Global Growth

Global Growth

IMF cuts outlook, warns of stagnation risk in rich nations  Full Article 

Monsoon Revives

Monsoon Revives

Monsoon revival keeps rain above average   Full Article 

Tackling Food Prices

Tackling Food Prices

India to free up extra 10 million tonne wheat in open market  Full Article 

Just Not Enough

Just Not Enough

Amazon's smartphone fails to kindle a "Fire" among reviewers.  Full Article 

Struggling Economies

Struggling Economies

Asian economies to struggle on weak export demand - Reuters poll  Full Article 

Rising Market Value

Rising Market Value

Facebook goes express to mega-cap status  Full Article 

Mining Roadblock

Mining Roadblock

Coal India's plans for 20 mines hit by land, environment delays  Full Article 

Power Jolt

Power Jolt

UAE's TAQA pulls out of India power plant deal with Jaiprakash  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage