Reliance Industries and its partner BP plc of UK will invest about Rs 6,000 crore (Rs 60 billion) by 2016 to help sustain and improve recovery from the two main gas fields in the eastern offshore KG-D6 block.
Also, the two firms are working to develop 3-4 Trillion cubic feet of gas discoveries off the east coast, BP India head Sashi Mukundan said at the India Energy Congress.
He said the focus area was enhanced oil recovery as even a 1 per cent enhancement can add almost 8 per cent to the existing proved reserves of India – about 450 million barrels of additional reserves.
"The same goes in terms of how we can extract gas from tighter and difficult reservoirs."
"Take the case of BP and RIL, an investment of Rs 5000 to 6000 crore in the 2014-2016 timeframe is enabling deployment of world-leading technologies for deep-water gas for the first time in India to sustain production and improve recovery from the two existing fields," he said.
Gas output from Dhirubhai-1 and 3 (D1&D3) fields in KG-D6 block has fallen from about 54 million standard cubic meters per day achieved in 2010-11 to just over 8 mmscmd due to unexpected water and sand ingress shutting wells after wells.
The block as well as NEC-25 off the Odisha has many discoveries which the two firms are focussing on.
"We have 3-4 tcf of discoveries in new fields that we are working to develop in the next several years," he said.
He said the government needs to support and unshackle industry to attract players to participate in this very capital intensive and risky business.
The government, he said, needs to play a key role as an enabler, and provide flexibility and space for participants to work at scale and build competitiveness.
"Globally, this is an industry which is used to assuming large risks including market risk and managing without any Government support", he said while calling for an enabling policy and regulatory environment including the freedom to market and price, with minimum intervention.
"In fact, it is well appreciated that the government assumes zero risk but benefits through taxes, royalty and profit share, in addition to the economic and developmental benefits to the nation," he said.
India's energy consumption is rising faster than any other nation – hydrocarbon needs are expected to rise by 120 per cent to more than 1,100 million tonnes of oil equivalent by 2035.
"The country needs to choose its options and align its energy mix wisely," he said, adding the Indian oil and gas sector is rich with opportunity and can attract many potential takers.