BG Group to Increase Investment in India
BG Group Chief Executive Frank Chapman said that the company and its Indian partners plan to increase natural gas production from their fields in western India. The partners will invest $750 million to raise natural gas production from the current rate of 180 million standard cubic feet per day to 450 million standard cubic feet per day over the next three years.
Chapman along with BG Chairman Richard Giordano and other board members of the company recently resolved a year-long dispute over control of the Tapti and Panna/Mukta offshore fields. BG bought a 30 percent stake in the fields off the Bombay coast for $350 million in February 2002 from Enron, which operated the fields. BG wanted operatorship of the fields, however, the other partners ONGC and Reliance Industries opposed to the move.
Now that a resolution has been reached, BG plans to stay in India for the long-term and is looking to double its investments in India to over $1 billion, he said.
Chapman said BG was waiting for regulatory changes to allow it to sell gas from the fields off the Bombay coast directly to consumers in Bombay and New Delhi. Currently, BG and its partners sell gas to state-run Gas Authority of India Ltd, which operates a pipeline to New Delhi and is the largest gas marketing company in India. "It is very difficult to look through the lens of an intermediary and understand what the customer wants," he said.
India plans to set up an independent regulatory authority to facilitate gas sales by private companies.