British oil and gas major BG Group has proposed to invest about $800 million over the next two years in developing the Panna-Mukta and Tapti oil and gas fields to improve production from the offshore fields.

"About $145 million is to be pumped into Panna-Mukta oil and gas field and around $659.5 million into the development of Tapti gas field," sources said.

The investment in Panna-Mukta field would result in an incremental oil production of 18.5 million barrels (2.46 million tonnes) and 2.15 billion cubic metres of gas.

For the Tapti field, incremental gas production is estimated to be around 10-12 million standard cubic metres per day (mmscmd), they said.

Natural gas production from Panna-Mukta will increase to 2.67 mmscmd in 2004-05 and to 2.88 mmscmd in 2005-06 from the current year estimate of 2.61 mmscmd. Tapti gas production would jump from 5.24 mmsmcd (2003-04) to 8.07 mmscmd in 2004-05 and 11.78 mmscmd in 2005-06.

For 10 years, beginning 2007-08, Panna-Mukta would have additional gas production of 2 mmscmd and Tapti of 3 mmscmd.

Sources said the investment would result in 0.2 million tonnes additional crude oil production from Panna-Mukta fields in 2004-05.

The incremental production from Panna-Mukta would be 0.4 million tonnes in the subsequent years.

BG has 30 per cent interest in the fields while Oil and Natural Gas Corporation has 40 per cent. The remaining is with Reliance Industries.

Of the total investment of $804.5 million, BG's share of the investment would be around $241.35 million and the remaining 70 per cent would be contributed by Indian partners -- ONGC and RIL.

"The development plan has to be approved by the management committee. The MC comprises representatives from the consortium as well as from the government, which is represented by the Directorate General of Hydrocarbons," sources said.