<p>UK's BP plc has sought clarity from Oil Minister M Veerappa Moily on natural gas pricing and said decisions on key issues like allowing exploration well in a producing field should be expedited.<br /><br /></p>.<p>BP Region President & India Head Sashi Mukundan on November 14 wrote to Moily saying "a few issues...that have been pending for a long, and if resolved, could help unlock India's energy potential."<br /><br />BP and its partner Reliance Industries have gas discoveries totalling around 5 trillion cubic feet in the now flagging KG-D6 block and NEC-25 block in Mahanadi basin that the two plan to develop in three-five years.<br /><br />"In order to make these investment decisions, it is important to have clarity on the pricing structure," he said. "This volume will displace imports worth USD 50-75 billion at current LNG prices."<br /><br />The Production Sharing Contract, he said, allows for arms-length market determined prices. "Oil produced from pre-NELP/NELP blocks and priced at import parity... a crude oil/liquid petroleum products linked pricing most appropriately represents a market linked price."<br /><br />"The pricing structure needs to be flexible," he said, adding RIL-BP are seeking clarity on gas price post-2014 when the current USD 4.2 per million British thermal unit rate expires.<br /><br />BP said RIL-BP have proposed to drill an exploration well within the D1&D3 producing fields in KG-D6 block but the Oil Ministry is proposing to ring-fence all such activities allowing cost recovery of only successful wells.<br /><br />"Ring fencing exploration, development and production is inefficient and disadvantageous. Ring fencing will also increase the exposure and risk," he said.<br />BP wanted permission for continued exploration instead of 'ring fencing'.<br /><br />Mukundan asked Moily for approval for three gas discoveries in KG-D6 and 2 in NEC-25. <br /></p>
<p>UK's BP plc has sought clarity from Oil Minister M Veerappa Moily on natural gas pricing and said decisions on key issues like allowing exploration well in a producing field should be expedited.<br /><br /></p>.<p>BP Region President & India Head Sashi Mukundan on November 14 wrote to Moily saying "a few issues...that have been pending for a long, and if resolved, could help unlock India's energy potential."<br /><br />BP and its partner Reliance Industries have gas discoveries totalling around 5 trillion cubic feet in the now flagging KG-D6 block and NEC-25 block in Mahanadi basin that the two plan to develop in three-five years.<br /><br />"In order to make these investment decisions, it is important to have clarity on the pricing structure," he said. "This volume will displace imports worth USD 50-75 billion at current LNG prices."<br /><br />The Production Sharing Contract, he said, allows for arms-length market determined prices. "Oil produced from pre-NELP/NELP blocks and priced at import parity... a crude oil/liquid petroleum products linked pricing most appropriately represents a market linked price."<br /><br />"The pricing structure needs to be flexible," he said, adding RIL-BP are seeking clarity on gas price post-2014 when the current USD 4.2 per million British thermal unit rate expires.<br /><br />BP said RIL-BP have proposed to drill an exploration well within the D1&D3 producing fields in KG-D6 block but the Oil Ministry is proposing to ring-fence all such activities allowing cost recovery of only successful wells.<br /><br />"Ring fencing exploration, development and production is inefficient and disadvantageous. Ring fencing will also increase the exposure and risk," he said.<br />BP wanted permission for continued exploration instead of 'ring fencing'.<br /><br />Mukundan asked Moily for approval for three gas discoveries in KG-D6 and 2 in NEC-25. <br /></p>