The Government has indicated that all the concerns raised by Reliance Industries-BP Plc have been resolved except one — gas price — on which hinges the two companies’ decision to invest $10 billion in the next four-five years.
On his fourth visit in a year, Bob Dudley, Group Chief Executive of BP, along with his Indian partner, Mukesh Ambani, Chairman, RIL, on Friday made a fresh attempt to convince the Government to resolve pending issues on the Krishna-Godavari Basin D6 block, including the contentious issue of gas pricing.
The two partners met the Finance Minister, Petroleum & Natural Gas Minister, and senior Government officials here.
Huge Investment
The contractors have been maintaining that at stake is investment worth almost $10 billion in their domestic business (six oil and gas blocks) over the next few years. BP-RIL have been worried about the stance taken by a section in the Government — that the benefits of revised gas prices, effective April 2014, should not be fully extended to the combine.
However, Petroleum Minister M. Veerappa Moily was confident that the two would together invest $10 billion till 2016-17.
He told media persons that “almost all their (RIL-BP) concerns have been resolved…one concern is there, which we are taking to the Cabinet Committee on Economic Affairs. They have given their side (of the issue) and we have told them our problems. Ultimately, it has come to a position of taking forward the decision.”
“We have the inputs from the Planning Commission and the Finance Ministry. Everything is in place now. Maybe, within a week or so, we would formulate the policy and in the light of the inputs given, it will go to the CCEA,” he added.
Fall in output
Moily said the RIL-BP had already invested $12 billion in KG D6.
He said that at the meeting, the contractors had assured that they would honour the production sharing contracts (PSCs).
Besides gas pricing, RIL-BP — partners in the country’s prolific KG-D6 block — said they were facing challenges in convincing the Ministry on the reasons for falling output from the producing fields in the block and expressed concern about the penalty being imposed.
After the meetings, Dudley said, “Today, I have met senior leaders in the Government and discussed opportunities and challenges in the Indian energy sector at large, and also specific to our deep water exploration and development projects. We are committed to working together with the Government of India in their quest for energy security.”
Recently, RIL and its partners in KG-D6 block, BP Plc and Niko Resources, got approval to invest $4 billion in the R-Series gas field in the block.