RIL eyes overseas buys to drive growth

Last Updated: Tuesday, November 17, 2009 - 20:13

Mumbai: Reliance Industries, India`s most
valuable company, is eyeing overseas acquisitions, aggressive
exploration campaign and investments in petrochemicals to
drive growth, Chairman Mukesh Ambani said on Tuesday.

RIL is aiming global scales in its core business of
conventional energy - petrochemicals, refining and oil and gas
exploration, even as it invests in new ventures like retailing
and alternative energy.
"Global growth by acquisitions" is key to growing its
energy business, Ambani told company shareholders. "Our
efforts would be to grow the conventional energy" business
through greater "global scale."

Though Ambani did not elaborate, his comments assume
importance as RIL is said to be looking at acquiring
petrochemical and oil refining assets in the US and may also
be looking at venturing into shale gas business.

"The business transformation initiative would create a
RIL that is able to scale up existing businesses; adds new
business both organically and inorganically," he said.

RIL shares fell 0.65 per cent to Rs 2133.75 in volatile
trade that saw the stock market closing flat.
On the domestic front, the company will pursue aggressive
exploration and production of oil and gas as it believes the
"business would give the company a much higher growth
trajectory in the coming years."

The company also plans to set up a petrochemical complex
in Jamnagar in Gujarat that would nearly double its currently
capacity to 4 million tons a year.

"Now that the oil and gas petroleum refining projects are
commissioned, RIL will work on making this world-class
(petrochemical) project a reality," Ambani said.

RIL has already converted Jamnagar into the world`s
single largest refining complex, with its two adjacent
refineries having a capacity to process 1.24 million barrels
per day.

"New oil and gas discoveries, new petrochemical project
and global growth by acquisitions in the energy and materials
value chain would exemplify the first platform," Ambani said.

The company`s MA oilfield in the predominantly gas-rich
KG D-6 block will hit peak output by year end. The field
started oil production in September last year and is currently
producing between 10,500 and 11,000 barrels of oil per day
from three wells. Three more wells are to be added to more
than double the output.

Ambani said RIL was working on developing nine gas fields
around the giant Dhirubhai 1 and 3 (D-1 and D-3) gas
discoveries which are currently producing around 45 million
standard cubic meters per day or 40 per cent of India`s total
gas output.

"Initial field development planning for accelerated
monetisation of nine more gas discoveries in this block is
underway," he said.

The discoveries would help extend the peak output of 80
mmscmd, expected in second half of 2010.
RIL had in July last year submitted a plan of investing
USD 5.91 billion in developing the nine satellite discoveries.
This investment is besides the USD 8.836 billion earmarked for
D-1 and D-3. For MA oilfield, the company is investing another
USD 2.234 billion.

The company has till date made 18 gas and one oil
discoveries in KG D-6 block.

To tackle global financial crisis that fundamentally
changed the world of business, RIL prioritised expenditure to
operationally critical areas and re-deployed capital to
petroleum refining and oil and gas projects for early
completion of projects.

Ambani said retail would be the "future growth engine"
for RIL. "We are developing an ecosystem which will strengthen
our offering, while bringing wealth to our stakeholders,
primarily marginal farmers, small transporters and vendors."

"Having achieved critical scale, Reliance Retail is now
working on expanding its covering. This expansion would
encompass new cities, new markets and new strategic
alliances," he said.

On RIL`s focus on renewable energy, he said pilot
projects in biofuels, solar energy and fuel cells have been
planned.

"As part of our road-map for value creation, we are
entering into the renewable energy space, as a natural
extension of our conventional energy platform. Our efforts
will be on piloting projects in alternative energy," he said.

Bureau Report



First Published: Tuesday, November 17, 2009 - 20:13

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