Reliance Industries Limited (RIL) and BP today announced that they are moving forward to develop already-discovered deepwater gas fields, bringing new gas production for India. The two companies have agreed to deepen and expand their partnership to work jointly across a wide range of areas throughout India’s energy sector.
RIL and BP announced that they will award contracts to progress development of the ‘R-Series’ deep water gas fields in Block KGD6 off the east coast of India. The R-series (D34) project is a dry gas development in water-depths of more than 2,000 metres, approximately 70 kilometres offshore. The R-series fields will be developed as a subsea tieback to the existing control and riser platform off Block KGD6. The project is expected to produce up to 12 million cubic metres (425 million cubic feet) of gas a day, coming on stream in 2020.
This is the first of three planned projects in Block KGD6 that are expected to be developed in an integrated manner, producing from about 3 trillion cubic feet of discovered gas resources. RIL and BP plan to submit development plans for the next two projects for Government approval before the end of 2017. Development of the three projects, with total investment of c. INR 40,000 crore (US$6 billion), is expected to bring a total c. 30-35 million cubic metres (1 billion cubic feet) of gas a day new domestic gas production onstream, phased over 2020-2022.
Mukesh Ambani, Chairman and Managing Director of RIL, said: “We are delighted to progress these developments, which will provide India with much needed indigenous energy and support the Prime Minister’s call for import substitution and the development of a gas-based economy. The solid relationship between our two companies is a great example of what can be achieved while working together at scale.”
Speaking in New Delhi today, Bob Dudley, BP Group Chief Executive, welcomed the investment: “This is an important step forward for BP in India. Working closely together, Reliance and BP are now able to develop these major deep water gas resources offshore India efficiently and economically. It is testament to our commitment to working in partnership with Reliance and with the Government to produce more energy in India, for India”.
India today consumes over 5 billion cubic feet a day of natural gas and aspires to double gas consumption by 2022. Gas production from the integrated development is expected to help reduce India’s import dependence and amount to over 10% of the country’s projected gas demand in 2022; benefiting India and domestic consumers at large.
Execution of the R-Series and following projects will require deployment of advanced skills, processes and technologies through the combined partnership of RIL and BP to develop and produce gas from these ultra-deep reservoirs.
The implementation of other two projects in Block KGD6 is subject to applicable regulatory and Government approvals.
RIL and BP will expand their existing partnership for strategic cooperation on new opportunities across India’s energy sector. Under the agreement the two companies will jointly explore options to develop differentiated fuels, mobility and advanced low carbon energy businesses in India, as India transitions to a low-carbon world.
The companies expect to collaborate, in addition to the conventional transportation and aviation fuels retailing, on unconventional mobility solutions, addressing electrification, digitization and disruptive mobility trends. Together, these collaborations will seek to address the mobility needs of urban, rural/farm, industrial/commercial, and highway consumers in India, applying the leading capabilities of both partners.
Mukesh Ambani commented: “This strategic partnership not only strengthens the relationship between two global energy leaders, but is also in line with and supports the forward-looking policies and vision of the Government of India.”
Bob Dudley added: “India’s demand for both energy and mobility is growing and evolving rapidly. This presents many opportunities for BP and Reliance to build on our existing strong relationship in upstream and expand our partnership further downstream. Combining skills and experience from both our companies, we expect to cooperate on mobility and advanced low carbon solutions and jointly explore other opportunities throughout India’s energy sector.
India is a rapidly growing market with a population of 1.3 billion people, consuming around 4 million barrels a day of oil products and with demand for fuels expected to grow by 5-7% per year over the next decade. BP and RIL are committed to being one of India’s preferred energy partners now and in the future.
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In order to utilize the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’), BP is providing the following cautionary statement. This press release contains certain forward-looking statements concerning BP and RIL’s plans to develop the R-Series’ deepwater gas fields in India, the expected production from these fields, plans to submit development plans to submit development plans for a further two projects in Block KGD6, the total expected production from the three projects, and the expected resultant import substitution, reduction of India’s import dependence and expected percentage of India’s projected gas demand in 2022, and the expected employment during the construction period; plans to expand the RIL and BP partnership downstream and in other areas and expected fuel demand over the next decade. Actual results may differ from those expressed in such statements, depending on a variety of factors including changes in public expectations and other changes to business conditions; the receipt of relevant third-party and/or regulatory approvals; future levels of industry product supply; demand and pricing; OPEC quota restrictions; PSA effects; operational problems; regulatory or legal actions; economic and financial conditions generally or in various countries and regions; political stability and economic growth in relevant areas of the world; changes in laws and governmental regulations; exchange rate fluctuations; development and use of new technology; the success or otherwise of partnering; the actions of competitors, trading partners and others; natural disasters and adverse weather conditions; wars and acts of terrorism, cyber-attacks or sabotage; and other factors discussed under "Risk factors" in our Annual Report and Form 20-F 2016.
This press release contains references to non-proved resources and production outlooks based on non-proved resources that the SEC's rules prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosures in our Form 20-F, SEC File No. 1-06262. This form is available on our website at www.bp.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or by logging on to their website at www.sec.gov.