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BG Group plans to invest $500 mn in Indian operations

New Delhi: British energy firm BG Group Plc plans to invest $500 million over next five years in its oil and gas business in India, reports PTI quoting the company's India head Walter Simpson.

"We are looking at both upstream and downstream opportunities for expansion in India," he said on the sidelines of the Petrotech-2010 oil and gas conference here.

BG Group has 30% stake in Panna/Mukta and Tapti oil and gas fields off the west coast. Besides, it has 25%-24% stake in three exploration blocks with state-owned Oil and Natural Gas Corporation (ONGC). It has a 65.12% controlling stake in Gujarat Gas Co Ltd, which sells gas in Gujarat, and 49.75% stake in Mahanagar Gas Ltd which retails CNG and piped gas in Mumbai.

Mr Simpson said BG and its partners ONGC and Reliance Industries are planning further investment in raising output from the Panna/Mukta and Tapti fields.

The fields currently produce about 35,000 barrels of crude oil per day and close to 13 million standard cubic meters per day (mmscmd) of natural gas.

He however refused to give details of plans for Panna/Mukta field.

The Panna field comprises 430 sq km of area, located 50km east of the giant Bombay High field and is 95km NW of Mumbai city. The Mukta field is comprised of 777 sq km of area, located 100km Northwest of Mumbai city. Tapti field covering an area of 1471 sq km lies 160km north-north west of Mumbai city.

ONGC has 40% interest and RIL the remaining 30% in the fields.

BG Group's aim is to optimise recovery from the PMT fields through ongoing existing field development (including well intervention and infill drilling) as well as new projects. The company will complete installation of Panna-L platform by December, with first production in early 2011, he said.

Mr Simpson said BG is looking at participation in the current ninth round under New Exploration Licensing Policy (NELP) where 34 blocks have been offered for bidding.

BG, he said, had expressed interest to pick a stake in ONGC's gas discovery block KG-DWN-98/2 after two foreign partners Petrobras of Brazil and Norsk Hydro of Norway exited the block.

"We had shown interest and the process is on," he said.

ONGC has made 10 natural gas discoveries in KG-DWN-98/2 block which sits next to Reliance's prolific KG-D6 block.


RBI cautions against higher current account deficit

Mumbai: The Reserve Bank of India (RBI) today said the country's widening current account deficit due to a larger import-export gap is a cause for concern and it is difficult to sustain, reports PTI.

"If the current trend persists, current account deficit (CAD) as a percentage of the gross domestic product (GDP) will be significantly higher than in the previous year," RBI governor D Subbarao said in the second quarterly monetary policy of the central bank.

Current account deficit is the gap between the amount the country pays to the external world against what it receives from abroad, barring capital movement. It was around 3.6% of GDP in the first quarter of 2010-11.

Mr Subbarao said it is generally perceived that a CAD above 3% of GDP is "difficult to sustain over the medium-term".

The trade deficit arising out of higher imports than exports during April-September of the current fiscal was $62.83 billion against about $48 billion in the same period last year.

Net invisibles as per the latest data up to first quarter of this fiscal available with of RBI were $20.5 billion against $21.2 billion in April-June 2009-10.

The net invisible receipts, which are surpluses of receipts over payments for invisibles like services trade, were about $79 billion in 2009-10, declining from about $90 billion in the previous year.

RBI said the continuing sluggishness of the global economy led to some moderation in exports growth and invisible receipts, while import growth accelerated due to the strong domestic recovery.

"The challenge, therefore, is to rein in the deficit over the medium-term and finance it in the short-term. The medium-term task has to receive policy focus from both the government and the Reserve Bank," Mr Subbarao said.

He said the short-term task is to see that the current account is fully financed while ensuring that capital flows are not far out of line with the economy's absorptive capacity and that the component of long-term and stable flows in the overall capital flows is high.


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