Mr Dudley's third visit to India this year comes at a time when Oil Ministry, at the insistence of Finance Ministry, is seeking to deny his company and its partner RIL a new gas price for producing less natural gas than projected.
This punishment is on top of $1.8 billion penalty that is already being imposed on them for the same crime. Also, the DGH is seeking to strip them off 8 gas discoveries holding 1.15 trillion cubic feet of reserves worth $14 billion from their eastern offshore KG-D6 block.
Sources said Mr Dudley on his way to attend a function with Gujarat Chief Minister Narendra Modi at Gandhinagar over the weekend, will make a night stop in Delhi.
He and Mr Ambani have sought meetings with Prime Minister Manmohan Singh as well as Finance Minister P Chidambaram on Friday. They may also use the opportunity to see Oil Minister M Veerappa Moily.
The duo will attend the third convocation of Pandit Deendayal Petroleum University at Gandhinagar on October 19. Mr Modi will be the chief guest at the function, they said.
Mr Ambani, who is the chairman of the board of governors of the University, has invited Mr Dudley to the convocation. This will be his third visit to India this year. His visit in February 2013 happened against the backdrop of a dispute with CAG over audit of spendings in RIL-BP's flagging KG-D6 gas block.
In April, he met the Prime Minister seeking market prices for natural gas as current sub-market rates were not drawing big investments.
The government agreed to a revision in gas prices from April next year but BP and its partner RIL may not be a beneficiary.
The Oil Ministry, at being coaxed by finance ministry, is moving Cabinet to deny RIL-BP the benefit of a new gas price that may be double of current $4.2 per mmBtu rate, until they make up for the shortfall during the last three years.
RIL-BP blame geological complexities like sudden fall in pressure accompanied by sand and water ingress in wells for the production from D1&D3 fields in KG-D6 dropping to 10 million standard cubic meters per day instead of rising to 80 mmscmd.
The Directorate General of Hydrocarbons (DGH) on the other hand blames the fall in production to RIL-BP not drilling committed number of wells.
Also, DGH wants RIL-BP to give up 1,130 sq km of area KG-D6 are more than the 5,367 sq km area they had offered to relinquish as per contractual requirements. This area contains eight discoveries.
BP holds a 30 per cent interest in 7 oil and gas blocks operated by RIL.