Feb 19 India's Reliance Industries and
UK partner BP 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
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
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
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.