BP Bets Big On NEC-25 For Gas Surge

New Delhi: Global energy giant BP Plc, which produces one-third of India’s natural gas, is targeting nearly 10 million cubic meters per day (mmscmd) of additional output from the NEC-25 block in the Mahanadi basin, spurred by recent upstream reforms introduced by the Modi government.

Its chief executive Murray Auchincloss said India’s upstream oil and gas policy overhaul through a new legislation has made several improvements important for foreign investors and will help attract global players.

BP and its partner Reliance Industries Ltd (RIL) produce about 28 million standard cubic meters per day or almost a third of India’s total gas output, from their Krishna Godavari basin deepsea block KG-DWN-98/3 (KG-D6) in the Bay of Bengal. The two are now looking to put into production discoveries in the Block NEC-OSN-97/2 (NEC-25) off the Odisha coast.

“Block NEC 25 represents an opportunity to unlock the hydrocarbon potential of a new hub on India’s East coast, with production potential of up to 9.9 mmscmd of gas,” Auchincloss said. “We and RIL with other industry operators in the area including ONGC are working with the Ministry of Petroleum and Natural Gas to progress development.”

He did not elaborate. BP-Reliance had in 2012-13 proposed a $3.5 billion plan for developing 1.032 trillion cubic feet of inplace reserves discovered in NEC-25. But the plan was delayed because of a dispute with upstream regulator the Directorate General of Hydrocarbons (DGH) over technical aspects of the finds. They have renewed plans after the government led by Prime Minister Narendra Modi unveiled a series of reforms in recent years.

“Working in our partnership, RIL and BP have already developed three projects in KGD6 Block, which together are currently producing 28 mmscmd of gas,” he said.

“We are working on multiple options to augment and sustain gas production from KGD6, such as infill drilling in the R-Cluster and Satellites Cluster, and well workovers on MJ.” Besides, the partners have two other exploration blocks that they had won in different rounds of OALP bidding - KG-UDWHP-2018/1 and KG-UDWHP-2022/1.