BP to Boost KG-D6 Gas Output by 50% by End-2014

BP expects gas output from India's offshore KG-D6 to rise by 50% to 16 mmscmd by end of 2014, company’s India’s head Sashi Mukundan told business news channel CNBC-TV18 on Thursday.

At the end of 2013, the production stood at around 11 mmscmd.

Mukundan said government’s decision to double domestic gas price was a step in right direction. However, BP and its partner in India, Reliance Industries (RIL) have been told by the government to give a bank guarantee to cover its liability if gas-hoarding charges are proved.

“The bank guarantee, which will be equivalent to the incremental revenue that RIL will get from the new gas price, will be encashed if it is proved that the company hoarded gas or deliberately suppressed production at the main Dhirubhai-1 and 3 (D1&D3) fields in the eastern offshore KG-D6 block since 2010-11,” Press Trust of India has reported.

According to Mukundan, BP would contribute 30 percent and Niiko Resources 10 percent towards the bank guarantee RIL has to submit to avail of the new gas price from April 1, 2014.

The global giant has decided to give shale gas a skip in India, and is looking at LNG and petchem as future engines of growth, reported CNBC-TV18.

BP plans to invest close to $10 billion between now and 2020 in Indian operations.

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