India seeks BP guarantee for jet fuel sales

OREANDA-NEWS. BP will have to provide an investment guarantee to qualify for marketing jet fuel in India.

BP must provide a bank guarantee and provide an investment commitment to get approval from the government to market jet fuel domestically, the oil ministry said.

India had rejected BP's application to market jet fuel on the grounds that the oil major did not meet the investment criteria required, oil minister Dharmendra Pradhan told parliament. India's jet fuel market is controlled by state-controlled refiners led by IOC. But Prahdan said BP was ineligible to secure marketing rights for the fuel.

Companies seeking marketing rights for transportation fuels including gasoline, diesel and jet fuel must have invested or proposed investment of 20bn rupees (\$320mn) in exploration or production, refining, pipelines or terminals leading to an increase in existing assets or the creation of new assets. BP claimed investment of \$477mn including \$259mn in capital expenditure and proposed investment of \$2.3bn.

BP and Indian conglomerate Reliance Industries have outlined plans to invest more than \$5bn during the next three to five years in a series of projects designed to boost natural gas production from the D6 block in the Krishna-Godavari basin off the coast of eastern India, known as the KG-D6 block. But low domestic gas prices and arbitration cases with Delhi over below-target output from KG-D6 have delayed spending.