RIL, BP to invest $5 bn in flagging KG-D6 gas fields

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SummaryReliance Industries and BP Plc, Europe's 2nd biggest oil co, will invest $5 billion to get gas flowing again.

invest USD 5 billion in the next few years into India's gas markets reinforces how two of Britain and India's leading companies can work together to invest in and supply the energy needs of the future, creating jobs and boosting prosperity."

"Gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence. My ministry is committed to provide necessary support to promote such investment in the domestic oil and gas sector. We will do the needful to fast track these projects and help them attain economic viability," assured Moily.

The statement quoted Ambani as saying that his firm's partnership with BP was "focused on finding more hydrocarbons and addressing the complexities of the geology along the east coast of India."

Dudley said: "We will bring all our expertise in deep water to explore the prolific gas basins in India and BP looks forward to a rewarding and successful exploration programme in the coming years."

Sources with direct knowledge of the development said RIL-BP may have sought to strongly counter what they consider twisting of facts by certain quarters on the issue.

They said there were disagreements on the scope of audit that cropped up on the very first day the Comptroller and Auditor General of India (CAG) began the second round of audit last month, as RIL felt the auditor was not confirming if the accounts scrutiny would be as per the provisions enshrined in the Production Sharing Contact (PSC).

RIL points to Oil Ministry's written assurance that CAG would follow the audit process set out in Section 1.9 of the Accounting Procedure of the PSC and that it would not be a performance audit of the contractor. But CAG at the January 9 audit kick-off meeting did to give any such assurance.

Sources said the CAG in the first round of audit for 2006-07 and 2007-08 has already audited about Rs 40,000 crore of investment and in the second round (for 2008-09 to 2011-12) only a small sum remains to be scrutinised and not Rs 25,000 crore as being claimed.

KG-D6 gas pricing from April next year may also have figured during the meeting at Moily's residence this morning. With BP not comfortable with the Rangarajan Committee recommendation of changing prices every month based on international hub rates, Dudley may have sought clarity on the government stand on free market pricing of the commodity.

RIL-BP statement said plans

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