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Reliance lays out Rs 35,000-cr capex plans

Our Bureau

Mumbai , April 29

RELIANCE Industries today said it would spend Rs 35,000 crore over the next five years; nearly three-fourths of it on exploration, production and marketing of oil and gas.

Mr Anil Ambani, Vice-Chairman and Managing Director, Reliance Industries, said Rs 15,000 crore of the total capital expenditure budget would be spent on developing the D6 gas field in the Krishna-Godavari (K-G) basin and putting up infrastructure for the transportation of natural gas. The company estimates that the D6 field holds about 14 trillion cubic feet of recoverable natural gas.

Mr Ambani said the company has earmarked Rs 4,000 crore for exploration and another Rs 7,000 crore for setting up retail outlets to sell petrol and diesel. The company currently has about 11 retail outlets while construction is progressing at another 400 sites. He said the company would have about 2,000 outlets by year-end.

Reliance would not have any difficulty in marketing refined products even if State-owned companies reduce offtake from it. He said Reliance would increase its exports from the Jamnagar refinery even though prices in the export market are lower by anywhere between 5 per cent and 25 per cent compared to domestic prices.

"Last year, public sector oil companies bought about 11 million tonnes of products from us. Their offtake may fall to at best 6-7 million tonnes. We will have our own marketing network selling what they do not pick up," Mr Ambani said. He expects the throughput in Reliance outlets to be at least double that of rivals. The average throughput of State-owned oil marketers is currently around 165 kilolitres per pump.

Reliance is also spending Rs 6,000 crore to put up new petrochemical capacities at its existing complexes at Jamnagar, Hazira and Patalganga. The expansion will raise the company's polymer production capacity from 12.5 million tonnes per annum to 15 million tonnes per annum in about two years, just in time when petrochemical prices cycle would be peaking.

"Compared with the previous one, we are yet at the beginning of an up-cycle in terms of petrochemical prices. We expect prices to at least double from here," Mr Ambani said. "India will be the third largest polymer market," he said adding that the company is increasing focus on research and development at its $30-million Reliance Research Centre, which has a strategic alliance with Dupont of the US, and churns out about 50 new applications every month.

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