BP bets on NEC-25 for gas surge, credits government’s reforms
New Delhi: Global energy giant BP Plc, which produces one-third of India’s natural gas, is targeting nearly 10 million cubic meters per day of additional output from the NEC-25 block in the Mahanadi basin, spurred by recent upstream reforms introduced by the Modi government.
Its chief executive Murray Auchincloss said India’s upstream oil and gas policy overhaul through a new legislation has made several improvements important for foreign investors and will help attract global players.
BP and its partner Reliance Industries Ltd (RIL) produce about 28 million standard cubic meters per day or almost a third of India’s total gas output, from their Krishna Godavari basin deepsea block KG-DWN-98/3 (KG-D6) in the Bay of Bengal.
The two are now looking to put into production discoveries in the Block NEC-OSN-97/2 (NEC-25) off the Odisha coast.
“Block NEC 25 represents an opportunity to unlock the hydrocarbon potential of a new hub on India’s East coast, with production potential of up to 9.9 mmscmd of gas,” Auchincloss said.
BP-Reliance had in 2012-13 proposed a $3.5 billion plan for developing 1.032 trillion cubic feet of inplace reserves discovered in NEC-25. But the plan was delayed because of a dispute with upstream regulator the Directorate General of Hydrocarbons (DGH) over technical aspects of the finds. They have renewed plans after the government led by Prime Minister Narendra Modi unveiled a series of reforms in recent years.
“Working in our partnership, RIL and BP have already developed three projects in KGD6 Block, which together are currently producing 28 mmscmd of gas,” he said. “We are working on multiple options to augment and sustain gas production from KGD6, such as infill drilling in the R-Cluster and Satellites Cluster, and well workovers on MJ.”
Besides, the partners have two other exploration blocks that they had won in different rounds of OALP bidding - KG-UDWHP-2018/1 and KG-UDWHP-2022/1. “If successful, discoveries could be developed using some already existing infrastructure,” he said.
BP has been in India for over a hundred years, with its connection through lubricant seller Castrol. India is amongst the fastest growing economies in the world, backed by industrial growth, infrastructure development, a young population and urbanization, and this is reflected by growth in its primary energy usage, the BP head, who was in India earlier this month, said.
“The country’s stable governance, policy support and access to a large high-capability talent pool makes investment here very attractive. Building on our long relationship, BP aims to be the trusted energy partner of choice to India. We will look to leverage and grow our current positions, bringing our global capabilities and technology to bear and deepening our partnerships,” he said.
