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Singapore — The aspiration of bp to transform to an integrated energy company will strengthen its hands to play a much bigger role in India's transition toward cleaner fuels like gas, hydrogen and renewables, Sashi Mukundan, India president and senior president of bp group told S&P Global Platts in an exclusive interview.

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While bp will be pushing ahead with its retail fuel and gas production strategies with its partner Reliance Industries, it will also be pursuing investments in various low-carbon energy segments, he added.

"As we grow our business footprint in the country, we seek to support India's energy transition, directly and through our partners, to deliver cleaner and more affordable energy," Mukundan said.

"The world's energy problems are getting more complex. They increasingly require complex and multienergy solutions. This plays to our strengths. We will diversify our company into different forms of energy -- renewables, bio and hydrogen," he added.

Mukundan's views echoed recent comments from Mukesh Ambani, India's richest individual and the chairman of Reliance Industries, who has pledged to embrace cleaner forms of energy, such as hydrogen, as part of efforts toward making the country's biggest private refiner a net carbon-zero company by 2035.

Mukundan added that COVID-19 has presented India an opportunity to prioritize its transition toward a low-carbon economy.

"Given the opportunities, India could attach green conditions to recovery packages, offer increased policy support for investments in infrastructure, fuels and technology that accelerates energy transition while creating growth and jobs," Mukundan said.

Highlighting details of bp's global strategic shift to an integrated energy company, Mukundan said bp would be seeking early positions in hydrogen and carbon capture technologies, while it would build out a customer gas portfolio to complement these low carbon energies.

In addition, bp would be looking across the globe to scale up its presence in the fuel sale segments in growth markets. While it will complete the ongoing wave of major hydrocarbon projects, it will aim to decrease capital intensity, resulting in lower upstream production and refining throughput.

Retail fuel, green ambitions

In July this year, bp and Reliance launched the Jio-bp retail venture. Mukundan said the venture would aim to expand the current fuel retailing network to up to 5,500 retail sites over the next five years from more than 1,400 at present. In addition, Jio-bp aims to boost presence in aviation fuel marketing to 45 airports from 30 in coming years.

"Over time, bp's ambition is to halve the carbon intensity of its energy products. Therefore, while expanding its presence in fuel retailing and aviation fuels, bp aspires to provide consumers with advanced fuels with lower emissions, EV charging and other low-carbon solutions," Mukundan added.

In recent months, bp announced investments in India's Green Growth Equity Fund, or GGEF, and Lightsource bp, which develops and manages solar energy projects.

"GGEF plans to invest in over $5 billion in green businesses. We will continue to look for additional business opportunities to further support India's low-carbon economy, including natural gas development, zero carbon and bio-energy initiatives," Mukundan said.

The gas dream

Reliance and bp in 2018 set up India Gas Solutions Pvt. Ltd., a 50-50 joint venture to source and undertake marketing of gas in India. Mukundan said gas would remain a key priority for bp in India.

"At bp, we believe that the world will need a decarbonized gas as a fuel to achieve net zero by 2050 or sooner. Gas will be decarbonized as hydrogen with carbon capture use and storage to get to net zero," he added.

Mukundan said India will face challenges in its move toward a gas-based economy, as the country aims to raise the share of gas in the energy mix to 15% from 6% by 2030.

"We believe that in order to fully realize India's gas potential and to significantly increase the share of gas, it is imperative to usher in changes like providing true marketing and pricing freedom, unified pipeline tariff, setting up of a gas exchange, a fair, transparent and nondiscriminatory access to gas pipeline infrastructure, and inclusion of gas in goods and services tax," he added.

In India, bp is currently pursuing the development of three deepwater gas projects in the KG basin, with an investment of $4.5 billion. The first project is expected to commence production later this year, while the next two projects are expected to come online in 2021 and 2022, respectively.

"Despite challenges posed by the global pandemic, we have been able to make progress on these projects. Most activities for the R-series project have been completed, and we expect to see first gas in the last quarter of 2020," he said.

Mukundan said there were still significant "discovered" and "yet to find" gas resources in India, which needs to be explored and developed. "Over the next three to five years, we hope to see a significant increase in gas production."

"While low LNG prices could potentially impact project returns, we believe these are cyclical and inherent risks in the upstream industry. It is imperative to allow for discovery of true market price without any regulatory restrictions," Mukundan added.