BP plc ( BP - Analyst Report ) , in a joint venture (JV) with Reliance Industries Ltd., plans to expend over $5 billion to boost output at D6 block in Krishna Godavari (KG) basin, a major natural gas field, off India's east coast. This is reflective of the JV’s attempt to boost gas production in India that has so long lagged expectations.

The British energy major and its partner, India’s Reliance Industries, intend to make this investment in the next 3 to 5 years in a series of ventures. These are mainly to develop around 4 trillion cubic feet (Tcf) of already discovered natural gas resources from the block.

Reliance is experiencing declining output at the D6 block for more than two years. In the last three quarters that ended Dec 31, 2012, gas production from KG-D6 dropped 37% to 275 billion cubic feet (Bcf) from the year-ago period owing to the complexity of reservoir and a natural decline in productivity.

Presently, the block produces 19 million standard cubic meters a day (mscmd) of gas. Reliance has a production goal of 80 mscmd gas. BP and Reliance also remain optimistic on KG-D6 as it was expected to contribute up to a quarter of India’s gas requirement. The latest investment decision is thus expected to benefit India by increasing yield and reducing dependency on import.

In this regard, the 2 energy giants closed their $7.2 billion agreement in August 2011, for a deepwater oil and gas exploration program in India. Per the deal, BP acquired a 30% stake in 23 oil and gas blocks operated by Reliance to provide its technological know-how for the exploration and production of gas from the deepwater area.

The companies are hopeful that the latest investment plan will augment gas production, starting next year. They are attempting to develop satellite projects and drill more wells for further hydrocarbon potential in the existing fields. These projects are subject to approval by the Indian government.

The BP-Reliance tie-up is expected to prove positive for BP, which is strengthening its foothold in growing energy markets, like India. BP has a strong pipeline of projects and expects 4 additional upstream ventures to commence by the end of 2013.

BP’s organic capital expenditure is estimated at $24 billion to $27 billion annually between 2014 until the end of the decade, while offloading non-core $2-$3 billion worth of assets annually.

BP − UK’s second largest oil company by market value after Royal Dutch Shell plc ( RDS.A - Analyst Report ) , is supported by a Zacks Rank #3, which is equivalent to a Hold rating for a period of 1 to 3 months.

However, there are other stocks in the oil and gas industry that appear more attractive. These include Total SA ( TOT - Analyst Report ) and Penn Virginia Corporation ( PVA - Snapshot Report ) that hold a Zacks Rank #2 (Buy).