Reliance Industries Limited (RIL), headed by Mukesh Ambani , will bring down the cost of gas import incurred by the government by 2020. The company is optimistic after the government approved its expansion plans for discovery of new blocks on KG-D6 basins. However, the company had submitted its proposals in 2010 for expansion and digging the existing wells to find new sources of natural gas and petroleum. The initial nod from the government even helped a major discovery of a huge gas block in KG-D6 located in Bay of Bengal.
Furthermore, the government is currently granting permissions for future expansions to accentuate output and help India to cut down its import expenses to half by 2020. In the last financial year, there was a whooping $151 billion oil import bill on the government which propelled current account deficit to a record and also led to a weakened rupee and accelerated the country’s inflation rate.
Mumbai-based Executive Director of RIL, Mr. P.M.S Prasad said, “The approvals have started coming in after nothing was happening for three years. This year, we drilled a new well looking for more gas; submitted plans to produce from discoveries, got budgets approved and resolved various issues. Things are moving now.”
For a stabilized economy of the country, the gas price will also play an important role. The production of gas will be dependent on the price it is accounted for. Chakravarthy Rangrajan, chief of the prime minister’s Economic Advisory Council, wants that gas prices in India should be average when compared to those in US, UK and Japanese imports.
According to a study, India has 27 trillion cubic feet of undiscovered gas reserves in non-developed fields. India’s 12 major petroleum basins may hold another 64 trillion cubic feet of gas. B.Ganguly, President of RIL’s petroleum exploration and production business said, “There is a lot of gas in India waiting to be developed and produced. It’s important these get government and regulatory approvals and market price to help the nation cut imports.”
European Petroleum giant, BP has partnered RIL in KG-D6 basins. They plan to invest $5 billion in developing the current fields and exploring new fields which have around 4 trillion cubic feet gas reserves in the block. This amount is equivalent to India’s two years of gas consumption. Recently, BP’s board of directors visited onshore gas terminal on the east coast. “BP’s directors visited our facilities and said it was one of the nicest projects they have seen in the entire world. They were happy with the projects we’re planning and with the positive regulatory environment in the country,” said Prasad.