Worried about K-G D6 gas, BP to hold full board meet in Delhi

British petroleum explorer BP Plc is scheduled to hold a board meeting in India for the first time this week as along with Reliance Industries Ltd, its majority partner in the Krishna-Godavari offshore gas fields, it seeks to make a case for market-based pricing of natural gas and reduction of government controls in exploration.

Members of the BP board, including chairman Carl-Henric Svanberg and chief executive Bob Dudley, arrived in New Delhi on Tuesday ahead of the board meeting.

Along with RIL chairman Mukesh Ambani, they are scheduled to travel to the K-G D6 gas block in the Bay of Bengal today.

The board members will be accompanied by RIL executive director PMS Prasad to Kakinada, the landfall point of the KG-D6 gas, as well as the deep sea fields.

Dudley had informed Prime Minister Manmohan Singh of the board meeting in New Delhi in a letter on 15 April.

"I have asked the BP board of directors to hold their May meeting in India so that the members can see the challenges and opportunities themselves before they are asked to consider additional investments in India," Dudley wrote to Singh.

In 2011, RIL had roped in BP with a 30-per cent stake in the hope that its expertise would help boost the production in the gas block, which has slumped to way below expectations.

Dudley had last week asked the government to lay a clear roadmap for replacing "the current sub-market price" for natural gas with market determined rates. In February 2012, it had made a strong pitch for import parity pricing of natural gas produced from the KG-D6 blocks, against its current price of $4.2 per million British thermal un(See: BP seeks three-fold hike in KG-D6 gas price).

"If the government chooses the mid-way pricing recommendation of the Rangarajan Committee, I respectfully request the government to consider ... 'an additional price incentive of $1.5 per mmBtu (per unit)' for deep sea fields to compensate for high cost and exploration risks," Dudley wrote.