Oct. 6 (Bloomberg) -- BG Group Plc, the U.K.'s third- biggest natural-gas producer, and its partners have boosted gas output from fields off western India by 48 percent to feed the nation's growing demand for energy.

Gas output from the Panna, Mukta and Tapti fields has risen to 17 million cubic meters a day, Oil Minister Murli Deora told reporters today in Mumbai, without specifying a time frame. The companies involved have spent $500 million to increase output, they said in a statement.

BG and Reliance Industries Ltd., India's biggest company by market value, each own 30 percent stakes in the area. Oil & Natural Gas Corp., the country's largest explorer, holds the rest. The partners may spend about $1 billion to increase gas and oil output from the fields over five years, William Adamson, BG India managing director, said on March 2.

The production increase ``shows there is a lot of potential to boost oil and gas output in India,'' said V.K. Sibal, India's director general of hydrocarbons. ``We are trying to encourage more companies to come and work in partnership with Indian companies to tap the potential.''

India may invite bids for oil and gas exploration in as many as 85 areas next month, Deora said today.

Reliance Industries, Oil & Natural Gas and Cairn Energy Plc are investing in exploration in India, where economic growth is boosting demand and domestic supplies are dwindling as output from aging fields stagnates. India currently imports three-fourths of its oil requirements.

Consumption May Rise

India's current gas supply of 85 million cubic meters a day, including imported liquefied natural gas, falls short of the potential demand of 170 million cubic meters, according to estimates by the Oil Ministry.

Gas consumption may rise to 400 million cubic meters a day by 2025 if the economy grows at a projected rate of between 7 percent and 8 percent a year. About 80 percent of the current supply is from Oil & Natural Gas.

Additional supplies of natural gas may lower India's need to import the fuel.

Reliance made the world's biggest gas discovery of 2002, off India's east coast. When production starts next year, it may double India's supply of the fuel. Reliance's field may produce 80 million cubic meters of gas a day.

Petronet LNG Ltd., India's largest liquefied natural gas importer, said on July 3 it agreed to buy 1.25 million metric tons of liquefied natural gas from Qatar to supply the country's biggest gas-fired power plant in Dabhol.

To contact the reporters on this story: Manash Goswami in New Delhi at mgoswami@bloomberg.net.

Last Updated: October 6, 2007 04:23 EDT