BP to pump in $3-4 billion with RIL, ONGC to boost oil & gas exploration
This investment aims to enhance production and expand BP's presence, contributing to India's energy security amid rising oil demand projected to reach 9 million bpd by 2050.
New Delhi: Global energy giant BP Plc plans to invest $3-4 billion in India’s oil and gas exploration & production (E&P) over the next three to four years, along with partners Reliance Industries and state-run ONGC, the company’s India head said in an interview.
The move comes as BP looks to expand its footprint in India, where it has already invested $12 billion and partnered with Reliance on Jio-BP, a venture focused on fuel retail, EV charging and lubricants.
BP India chairman Kartikeya Dube said the company is also in talks with Oil India Ltd, another government-owned oil and gas major, for partnering in the E&P space.
“We collaborate with all companies in India," Dube said, adding that the company took a bet on India 14 years ago, and as its understanding of the market has grown, it has seen its investments produce results.
“Today (KG D6 Block) is producing one third of India's natural gas," Dube said. “That’s one billion cubic feet today." KG D6 is a deep-water gas project in India's Krishna Godavari basin.
BP signed an MoU with ONGC this February to operate as a technical services provider (TSP) for ONGC's Mumbai High field. Dube said BP is supporting ONGC in enhancing the production of the field, where it would work to uplift production by 60%.
The current production level of Mumbai High—one of India’s largest offshore oil fields situated in the Arabian Sea—is 134,000 barrels per day (bpd), accounting for 35 per cent of India's domestic oil production, according to data from ONGC.
According to Dube, the company would target more such production-enhancement projects along with focus on new E&P projects with the fresh investment.
“So, you have to have a two-pronged approach," Dube said. “One is how you can get more out of what you have. The second one is developer... (involving) exploration, appraisal, development and production. So, in both of those, we are continuing to put in our efforts."
He pointed out that the BP-Reliance JV is investing $1 billion in KG Basin for E&P activities and also carrying out production enhancement and other activities there. “We also see potential in the Mahanadi basin and so, (for) KG Basin and Mahanadi, we will be participating in OALP-X," he said.
Meanwhile, amid the plans to boost investment in India, BP Plc CEO Murray Auchincloss is set to visit India this week, his third visit this year.
Drill, then explore
Stressing on the need for data collection for successful exploration and production of oil and gas, the BP India chairman said the company would actively work on stratigraphic wells as required under the government's National Deepwater Exploration Mission. A stratigraphic well is drilled to obtain geological information, and not for oil or gas production, which may follow later.
“Stratigraphic is not exploration—it is to drill a well to the source rock, which is, for example, the base," he explained. “Based on the quality you find, you think about what kinds of reservoirs can be there. So, once you analyze the stratigraphic data, then you get into exploration. Then you will tend to find a discovery."
In June, ONGC and BP signed a memorandum of understanding (MoU) to collaborate on drilling stratigraphic wells in four offshore sedimentary basins in India—Andamans, Mahanadi, Saurashtra and Bengal.
He added that recent reforms including the Oilfields (Regulation and Development) Act and plans for more 2D and 3D seismic data acquisition would be key in finding more reserves and boosting local production.
Energy security
Looking beyond individual projects, Dube also highlighted the assessment of BP’s Energy Outlook 2025 report that efforts to enhance domestic oil and gas production would be important to ensure energy security in these volatile times.
“If we are importing 85% of our energy, we need to do as much as we can. Energy security now means you need to produce and make in India. You have to get it from all sources," he said, referring to the need to develop all sources of energy including renewable energy.
Spencer Dale, chief economist at BP, told mediapersons on Monday that as geopolitical uncertainty rises, India needs to boost domestic production of oil and gas, and accelerate electrification of industrial operations backed by coal and renewable power to achieve energy security.
According to BP's outlook, India's oil demand is projected to grow from 5 million bpd in 2023 to 9 million bpd in 2050, going by the current trajectory.
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