BP eyes major expansion in India’s oil and gas sector-OxBig News Network

The development comes in the backdrop of recent reforms initiated by the Centre to attract more investments in the key sector.

In an email interview, Murray Auchincloss, chief executive officer of the London-headquartered energy major, said that in line with the Centre’s focus on the E&P space to achieve self-sufficiency for India, the company’s participation in bidding round for energy resources has gained momentum, which will help it expand its presence in the country.

“RIL and BP supply about one-third of India’s domestic gas production,” said Auchincloss. “We will seek to sustain and grow this through production enhancements in our current blocks, seeking new exploration licence access jointly with RIL and ONGC, and the development of discovered/marginal resources in other blocks through infrastructure sharing.”

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Further, he said BP would also look at expanding its partnership with ONGC to more oil and gas fields. This February, state-run ONGC and bp signed a contract under which BP would serve as the technical services provider (TSP) for the Mumbai High field, India’s largest and most prolific offshore oil field.

“Working with ONGC, deploying our technology, skills and capabilities, we believe around a 60% increase in production from the baseline is possible over the initial contract period of 10 years,” said Auchincloss, adding that there is significant potential to expand the partnership to other oil and gas fields “and through growing partnerships in the value chain”.

BP in India

BP, one of the largest international energy companies in India, has been present in the country’s natural gas space through a partnership with RIL that operates in the Krishna-Godavari and Mahanadi basins off the eastern shore and includes a 50:50 gas marketing joint venture, India Gas Solutions Pvt. Ltd.

BP’s activities in India also include Castrol lubricants, oil and gas trading, clean energy projects through Lightsource BP, IT back-office activities, a new global business services centre, staffing and training for the global BP marine fleet, and the recruitment of skilled Indian employees for bp’s global businesses.

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BP and RIL produce about 28 million standard cubic metres of gas per day—almost a third of India’s total output—from their Krishna Godavari basin deep-sea block KG-DWN-98/3 (KG-D6) in the Bay of Bengal. They are now eyeing production of natural gas from the discoveries in the Block NEC-OSN-97/2 (NEC-25) off the coast of Odisha.

The fresh plans to expand its operations into new field comes amid the government’s reform initiatives including the recent approval to the Oilfields (Regulation and Development) Amendment Bill 2024 by Lok Sabha last month. Apart from several reform measures, the bill’s proposal to delink petroleum operations from mining is expected to bring in more investments into the sector.

RIL and BP supply about one-third of India’s domestic gas production.
—Murray Auchincloss

BP and ONGC jointly bid for offshore acreages in OALP-IX and are expected to take part in the tenth round.

To be sure, under India’s Hydrocarbon Exploration and Licensing Policy (HELP), the Open Acreage Licensing (OALP) mechanism of auction of hydrocarbon blocks for exploration and production allows prospective investors to carve out blocks of their choice by assessing E&P data available in the National Data Repository before filing an expression of interest. OALP-IX refers to the ninth round of the auctions.

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On the ongoing volatility in the energy market post the reciprocal tariffs announced by the US, the CEO said, “Geopolitical or trade tensions could lead to volatility in oil and gas markets, but we expect continuing robust demand for oil and gas over coming years, with especially strong growth in natural gas demand in India and in a number of other emerging Asian economies.”

He further said the company will grow its oil and gas business, increase investment to grow production, while also growing its cash flow.

“We are focusing our customers and products business – reshaping the portfolio to focus on markets and businesses where we have advantaged and integrated positions. And we continue to believe the energy transition presents a significant opportunity—we will invest with discipline to deliver the returns our shareholders expect. BP’s upstream will continue to be a primary cash-generating business, and our aim is to be the partner of choice for countries, helping them create value from their resources while meeting robust oil and gas demand.”

Regarding the company’s retail portfolio in India, which is operated by another joint venture with RIL called Jio-BP, Auchincloss said the company aims to be a leader in the mobility space and expects the growing demand for both fuels and electric mobility in India to drive its growth in this space.

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“Our downstream retail JV with RIL—Jio-BP—delivering retail fuels, convenience, aviation fuels, biofuels, EV charging and LNG for trucking is doing really well and we expect to see substantial growth. We’re investing in advantaged and integrated positions where our brands, products and services can drive greater margins–and continuing to high grade our network of sites,” he said.