Mukesh Ambani, Chairman of Reliance Industries (RIL) and Bob Dudley, head of global energy firm BP met Prime Minister Manmohan Singh and some government officials recently to discuss their investment plans.
The two companies, that are jointly operating the KG D6 gas basin in Andhra Pradesh, asked government to clarify regulatory issues plaguing the oil and gas sector.
During the meeting, both the company officials discussed their plan to put satellite gas fields in the flagging KG-D6 block as also bringing discoveries in eastern offshore NEC-25 block to production.
Dudley urged government to clarify pricing of natural gas that will be implemented upon expiry of the $4.2 per million British thermal unit rate a year from now.
He wants the government to shed light on how it would adopt the market determined natural gas pricing mechanism in the next 3-5 years. Clarity on this issue would enable exploration firms to compute returns on their investment.
Both Dudley and Mukesh Ambani are of the view that the Rangarajan Committee recommendation of doubling domestic natural gas price to $8-8.5 per mmBtu will be inadequate for bringing high risk deepsea discoveries to production.
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