Announcing its fourth quarter and full 2014 results, BP said: "Third quarter, fourth quarter and full year 2014 include write-offs of USD 375 million, USD 20 million and USD 395 million respectively relating to block KG D6 in India."
     
"In addition, impairment charges of USD 395 million, USD 20 million and USD 415 million for the same periods were also recorded in relation to this block," it said.
    
The company did not explain the reasons for the write-off and impairment charges.
     
BP in 2011 bought 30 per cent interest in Reliance Industries' eastern offshore KG-D6 as well as 20 other oil and gas exploration blocks for USD 7.2 billion. Bulk of this was for the producing block of KG-D6 and gas discovery area of NEC-25.
    
In the third quarter result announcement on October 28, 2013, BP had said the write down arose "as a result of uncertainty in the future long-term gas price outlook, following the introduction of a new formula for Indian gas prices, although we do see the commencement of a transition to market-based pricing as a step in the right direction".
 
The government had on October 18 last year approved a new formula for pricing of all domestic gas. The rate, when the formula comes into effect from November 1, would be USD 5.61 per million British thermal unit as against current USD 4.2.
     
The price is lower than USD 8.4 approved by the previous UPA government and general expectation of a rate around USD 6.5 after some deductions from that price.
     
Both BP and RIL have been advocating market-linked gas pricing and had initiated an arbitration against the government for not revising rates from the due date of April 1, 2014.

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