Financial Daily from THE HINDU group of publications
Tuesday, Jun 17, 2003
Industry & Economy - Petroleum
Corporate - Announcements
Rs 1,500 cr to be spent on exploration
Mr Mukesh Ambani, Chairman and MD, Reliance Industries, meeting shareholders during the company's AGM in Mumbai on Monday.
MUMBAI, June 16
ENCOURAGED by the recent gas and oil finds, Reliance Industries Ltd would be making fresh investments to the tune of Rs 1,500 crore ($300 million) in exploration over the next two years.
Announcing this at the company's AGM here today, Mr Mukesh Ambani, Chairman and Managing Director, RIL, said the gas discoveries in the Krishna-Godavari basin on the east coast is estimated at 14 trillion cubic ftt - double the volume of 7 trillion cubic ft estimated earlier. The finds would mean additional Rs 10,000 crore revenue for the company annually. However, no operating revenues are expected from the K-G gas till 2006.
Elaborating on RIL's increasing interests in the oil and gas sector, Mr Ambani also announced that RIL has struck gas in an onshore block in Yemen, where it holds oil equity. This discovery is equal to about half of Reliance's share of crude oil from the Panna-Mukta-Tapti oil and gas fields which produce 26,000 barrels of oil and 2.4 mmscmpd gas. Mr Ambani said: "Reliance will be building a gas transmission infrastructure to take gas to industrial, commercial and household consumers by the year 2006." In the second-half of this decade, between 25 to 33 per cent of the company's profits are expected from the upstream business.
However, there was no mention of a reported gas find in Madhya Pradesh where the company has interests in coal bed methane. On the oil retail business, he said Reliance's plans are not contingent on the disinvestment of Government stake in the State-owned oil refiner and marketer HPCL.
Reliance plans to set up 1,500 retail outlets in the first phase of its retail plans. It has permission to set up 5,800 retail outlets across India. The company will raise the capacity of its Jamnagar refinery once the downstream retail market grows, Mr Ambani said. The 27 million-tonne refinery can now process 31 million tonnes crude after the recent de-bottlenecking.
The company plans to set up two million tonnes additional petrochemical capacities over the next three to five years.
Mr Ambani said the company plans to leverage the distribution strength of the newly-acquired Reliance Energy Ltd (erstwhile BSES Ltd) to derive convergence benefits for its infocom, retailing and other service sectors.
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