The big announcement follows increasing comfort with the policy and pricing regime for natural gas after prolonged acrimony during the previous government that halted investment in one of the most promising oil and gas basins.
BP and RIL also announced a strategic partnership for initiatives in transport and aviation fuel retailing and a big push to jointly tap global opportunities in the low-carbon energy domain, which includes transportation and renewable energy — an initiative that Ambani said would take Indian technology and innovation to the world market.
The two plan to award contracts to develop the R-Series deep-water gas field that is expected to produce up to 12 million cubic metres of gas a day from 2020. The companies plan to submit a development plan for two more projects by the end of 2017. Together, the three fields are expected to produce 30-35 million cubic metres of gas a day by 2022.
"We have seen over the last two years the change in policies and support that has given us the confidence with Reliance to make this very significant investment," Dudley said. "We have reprioritised our global investments to include these projects."
The government last year allowed operators to seek higher prices for gas produced from deep-sea fields. But Reliance and BP will have to withdraw arbitration related to gas price against the government to benefit from this policy.
Popular in Energy
Reliance and BP are locked in multiple arbitration cases with the government.
"We are pretty sure that we will get a fair outcome (in arbitration). We don't think that this will come in the way of our future investments," Ambani said, without clarifying if the companies were considering withdrawing the arbitration relaed to gas prices.
As the world continues to focus on climate change, policies that support free-market pricing for natural gas would be beneficial for the industry and would reduce India's dependence on import for gas, Dudley said. Incentives to combine renewable energy with gas as a link fuel would create another opportunity, he said.
Reliance and BP expect to collaborate on the transportation and jet fuel retailing business. Reliance already operates in both segments dominated by state oil companies. BP has also obtained licences to run petrol pumps and the aviation fuel business but hasn’t started these yet.
The two companies also plan to jointly explore options to develop differentiated fuels, and unconventional mobility solutions. Ambani said details on these will be shared over the next several months and years but the attempt would be to engage the best universities and minds across the globe and undertake experiments to bring out solutions that benefit the world.
Six years ago, Ambani and Dudley signed a $7.2-billion deal for the sale of a 30% stake in 23 hydrocarbon blocks, including those in the KG Basin.
