India’s oil and gas sector could see investments to the tune of R2.5-3 lakh crore by 2022 to unlock 10-15 trillion cubic feet (tcf) of natural gas resources, said Sashi Mukundan, head of the hydrocarbon committee for industry body CII.
On Tuesday, the top executives of oil and gas companies such as BP, RIL and Cairn India, among others, discussed the roadmap for aggressive exploitation of natural gas in the country with petroleum minister Dharmendra Pradhan and secretary in his ministry K D Tripathi.
Mukundan, who is the country head for British oil and gas giant BP, said that the investments could substitute about R10 lakh crore of imports. “We just had a closed door meeting with the petroleum minister and his team. They support building India into a gas-based economy. It is not just about producing more gas but how to bring the fuel to the customers. It is about building a business case for all segments including power, fertiliser and city gas distribution industries,” Mukundan said after nearly two-hour long meeting.
The BP country head said that the 10-15 tcf is the estimates of discovered reserves that could be monetised in the coming years.
The petroleum minister expressed concern over the industry leaders presenting projections and numbers that were dated two years back. Some of the data presented by the CII panel were dated back to 2014.
Interestingly, BP and its Indian partner RIL are not able to sustain natural gas output from its deep water block in the KG Basin — popularly known as KGD6. The explorers have initiated three arbitrations with the government related to KGD6 and have not announced any investment plans to ramp up output from current fields or develop new areas in the block. The Modi government’s new gas pricing policy for difficult fields has put a caveat that RIL and BP would have to withdraw the arbitration in order to enjoy higher gas prices.
Mukundan declined to comment on questions specific to BP. When asked if explorers would like to make an investment commitment in a low price scenario, Mukundan said that these actions would be seen in the next 18-24 months.