British oil and gas major BG Group and its Indian partners -- Oil and Natural Gas Corporation and Reliance Industries Ltd -- will invest $140 million over the next 18 months in the Panna-Mukta and Tapti oil and gas fields to improve production from the offshore fields.

"The partners have approved investment of $140 million in phase-I expansion of the Panna-Mukta oil and gas fields and Tapti gas field," Nigel Shaw, CEO, BG India, told reporters in New Delhi on Friday.

The first phase investment, which is awaiting the government approval, will increase crude oil production from Panna-Mukta fields by 5,000 barrels per day to over 30,000 barrels per day by the end of 2004.

Gas production from the Tapti field will increase by 2-2.5 million standard cubic metres per day over the current production of around 6 mmscmd.

Four in-fill wells would be drilled in Tapti and 7 wells at the Panna-Mukta fields. Another 11 in-fill wells can be drilled on Panna-Mukta, he said.

Shaw said in the second phase, beginning by the end of 2004 and lasting 2007, another $450 million will be invested in increasing production from the fields.

"With this investment, the Tapti gas field production would increase close to 13 mmmscmd," he 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.

He said the proposed investments would be shared among the partners in proportion to their equity. While ONGC has 40 per cent stake in the fields, BG and RIL have 30 per cent apiece.