RIL, BP to invest $5bn in KG basin Will Raise Output Over 3-5 Yrs To Develop 4Tn Cubic Feet Of Gas From D6 Block

Mumbai: Energy major Reliance Industries (RIL) and British firm BP Group plan to invest over $5 billion (over Rs 27,000 crore) in the next three to five years to increase production from its showcase KG-D6 block off the country's east coast. The two partners plan to develop 4 trillion cubic feet (tcf) of natural gas reserves from the block.      BP Group chief executive Bob Dudley and RIL chairman Mukesh Ambani met petroleum minister Veerappa Moily on Tuesday to apprise him of the two companies' joint plans for India. However, these investments are subject to government approvals that may come only after the company opens its books of accounts to the Comptroller and Auditor General (CAG) of India for audit. RIL and CAG differ over the nature & scope of audit of the KG basin blocks. The petroleum ministry is trying to broker a deal between the two.      "At current international liquefied natural gas (LNG) prices, it would cost more than $50 billion to import this volume of gas into India. This plan, when implemented, would entail a potential total investment in excess of $5 billion over the next three to five years," an RIL statement said on Tuesday.      Leading the largest-ever trade delegation from the UK to any country, British Prime Minister David Cameron said, "BP is already the largest singleBritish investor in India and the decision to join forces with Reliance Industries to invest $5 billion in the next few years into India's gas markets reinforces how two of Britain and India's leading companies can work together to invest in and supply the energy needs of the future, creating jobs and boosting prosperity."      Moily said, "Gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence. My ministry is committed to provide necessary support to promote such investment in the domestic oil & gas sector. We will do the needful to fast-track these projects and help them attain economic viability." Ambani and Dudley agreed to accelerate the pace of exploration and development activities as soon as necessary approvals are received.      "The BP and RIL partnership is focused on finding more hydrocarbons and addressing the complexities of the geology along the east coast of India. We hope to significantly contribute to India's domestic production and help the country attain energy security," said Ambani. Implementation of the plan will require deployment of advanced skills, processes and technologies through the combined partnership of RIL and BP to produce gas from water depths of more than 1,500 metres. "We will bring all our expertise in deep water to explore the prolific gas basins in India," said Dudley.  STEPPING ON THE GAS  • BP Group CEO Bob Dudley and RIL chief Mukesh Ambani met oil minister Veerappa Moily to apprise him of the two cos' joint plans for India  • Moily said he is committed to providing support to promote such investments  • Welcoming the minister's assurance, both Dudley and Ambani agreed to accelerate development activities after getting necessary approvals OIL BLOCK-ED? Home min seeks RIL's KG report Move Sparked By Application For Aerospace Biz Security Nod  New Delhi: Differences with the oil ministry and the federal auditor as well as falling production from the showcase Andhra offshore field appear to be dogging Reliance Industries (RIL) promoter Mukesh Ambani's aerospace dream.      The home ministry has sought a dossier on RIL's alleged violation of the contract for the KG-D6 field and the government slapping a $5.5-billion penalty on the company for failing to achieve the production target for which it had secured investment approvals.      Communication within the government accessed by TOI shows that the home ministry's move was sparked by the Department of Industrial Planning and Promotion seeking security clearance for granting Mukesh Ambani-led Reliance Aerospace Technologies licence to manufacture aircraft parts and accessories.      The home ministry wrote to the oil ministry on January 1. This was then forwarded to the oil ministry's technical arm, DGH (Directorate General of Hydrocarbons), for comments. "The letter from MHA (ministry of home affairs) has mentioned the violation of the PSC (production sharing contract) with regard to compliance of work programme, and production rate, in the D-1 and D-3 gas fields of the KG-DWN-8/3 block by RIL... The MHA has sought detailed report/facts on the above violation of PSC  by RIL," DGH replied to the ministry on February 11.      "Despite repeated requests by the government in various correspondences and also in the management/ technical committee to comply with the commitments made in the approved AIDP (field plan), contractor failed to satisfactorily respond and perform their obligations in terms of international petroleum industry practices, as required by the PSC," the DGH has said.      Faced with adverse comments from federal auditor over the falling gas production, the oil ministry had in May 2012 decided against letting RIL recover $5.5 billion it invested in creating additional infrastructure for pumping 80 mcmd (million cubic metres a day) of gas, which stands at 20 mcmd. RIL has initiated arbitration proceedings against the government over the order. (From L) RIL chairman Mukesh Ambani, UK PM David Cameron and BP Group CEO Bob Dudley in Mumbai