The chairman of Reliance Industries Limited (RIL), Mukesh Ambani and BP plc head Bob Dudley on Monday met Prime Minister, Manmohan Singh and Deputy Chairman, Planning Commission, Montek Singh Ahluwalia and sought a new roadmap for market driven natural gas prices and clarity on the regulatory issues that were hampering investments in the oil and gas sector.
During his meeting with Dr. Singh and Mr. Ahluwalia, Mr. Dudley sought clarity on pricing of natural gas that will be implemented upon expiry of the $4.2 per million British thermal unit price from March 31, 2014. "They were very concerned and wanted the government to take view on the issue on the fast track. The process for that is already underway and I was not able to tell him what the roadmap would be," Dr. Ahluwalia told reporters.
Both Mr. Dudley and Mr. Ambani provided the Prime Minister a brief about the investments both BP and RIL plan to make in quickly putting satellite gas fields in the flagging KG-D6 block and also bringing discoveries in Eastern offshore NEC-25 block to production. "We are the largest investor in India. We have come to review progress of plans. We very pleased with the events that allowed the firm to drill an exploration well on the currently producing fields in KG-D6 block well after the expiry of exploration phase," he said.
Both BP-RIL have been pitching for making a clear roadmap for migrating to market determined gas pricing in the next 3-5 years so as to provide clarity to producers to make investment decisions.
The Rangarajan panel was of the view that the current price for domestic gas was out of sync with global rates and suggested an interim hybrid producer price derived by averaging international hub prices with cost of imported liquid gas (LNG) for next five years.
Dr. Ahluwalia said both the BP and RIL heads briefed him about their assessment of production they could get from D6. Output from KG-D6 block has this month fallen to all-time low of 16.5 million standard cubic meters per day and BP-RIL see an upside of at least 30 mmscmd if satellite and smaller fields surrounding the currently producing main fields are quickly brought into production. "Mr. Ambani also briefed me about the developments on RIL’s foray into the 4G telecom venture and the prospects ahead," he added.