V Srikanth, the head of markets for South Asia at Citigroup Inc, will join Mukesh Ambani’s Reliance Industries as deputy chief financial officer as the refinery-to-retail major looks to hire executives with expertise in global financial markets to manage its expansion plans.

Mr Srikanth, 44, is leaving Citigroup after a 20-year stint with the New York-based company, a person familiar with the matter said. The former Country Treasurer of Citi group is likely to oversee global risk management, among other things, at RIL and will report to CFO Alok Agarwal. “Srikanth left Citi to take up a challenging assignment as RIL is expanding into diverse areas,” said the person. A chartered accountant, Srikanth was part of many global market transactions at Citigroup.

Pankaj Vaish, managing director and head of equities at Nomura Financial Advisory & Securities (India), will replace Mr Srikanth at Citigroup’s Indian operations, according to a press release from Citigroup.

The Reliance spokesman declined to comment.

India’s largest private sector company is investing money generated by its gas business to buy assets abroad. It has acquired two shale gas assets in the US and is said to be close to concluding its third purchase of shale gas assets.

The company has recently appointed Vivek Paranjpe as the head of HR with a mandate to formalise succession planning, groom managers and restructure performance management systems. A Reliance veteran, Mr Paranjpe has worked with multinationals such as Hewlett-Packard . Mr Paranjpe succeeds the late VV Bhatt, who brought talent to the company from public sector behemoths as the company built its petrochemical and refining assets.

Source:http://economictimes.indiatimes.com/articleshow/6174587.cms

India recorded the highest rise in natural gas output worldwide in 2009 after Reliance Industries’ eastern offshore KG-D6 field came into production, Economist Christof Ruhl said.

Mukesh Ambani-run RIL began gas production from the Krishna-Godavari basin in April, 2009, and its 60 million standard cubic metres per day output led to a 75 per cent jump in natural gas availability in the country to 140 mmscmd.

“Last year, India had the highest increase in production of natural gas worldwide. And I just checked, it also had the highest corresponding increase in consumption in natural gas worldwide,” BP Plc Group Chief Economist Christof Ruhl said. The jump in natural gas production in India was possible because the government allowed private sector firms to take a lead in exploration for hydrocarbons.

“When you look at countries where gas production is heavily government-controlled, like Russia, they had the biggest decline in gas production and consumption,” he said. “When you look at countries where new technologies have been developed like unconventional shale gas in the US… it was because they have an investment environment which is very competitive,” he said. Shale gas, trapped in sedimentary rocks, is said to hold the potential of doubling gas output in US.

Ruhl said that it was very clear who was left behind, as countries where natural resources were tightly controlled were less flexible.

Source: Economic Times

The Mukesh Dhirubhai Ambani Group is close to signing an equal joint venture agreement with global private equity and hedge fund company DE Shaw to enter the financial services sector, the Economic Times reported today.

The tie-up will enable the Mukesh Dhirubhai Ambani group, whose flagship is Reliance Industries (RELI.BO), to offer services like energy and carbon trading and related derivatives in which DE Shaw has expertise. It will also enter more conventional sectors such as private equity, mutual funds, and other security-linked offerings, reports said. Financial terms are not available yet and it was not clear whether the joint venture would be set up under Reliance or held directly by Mukesh Ambani.

Earlier this year, the Indian government had said that it would reconsider norms for issuing banking licences but the RBI has indicated that it would not allow industrial houses such as the Tatas or RIL to enter this sector. Whether even a JV will get such a licence is debatable. However, the JV is unlikely to encounter too many problems if it sets up a non-banking finance company or NBFC which can offer an array of services ranging from broking to investment banking. Many business groups, such as the Tatas and the Adiyta Birla Group, house an NBFC in their ranks. Unlike banks, NBFCs cannot offer checking deposits to individuals and are therefore more lightly regulated than banks.

Mukesh Ambani is on the DE Shaw, India, controlling board, an entity which oversees the operations here. The negotiations are being handled by Manoj Modi, a close lieutenant of Mr Ambani, according to ET. The JV may eventually seek a banking licence in India.

Source:http://news-views.in/mukesh-ambani-considers-foray-into-financial-services

Reliance Industries, India’s biggest company by market value, plans to build at least one power plant in the country marking the oil company’s entry into commercial electricity generation, two company officials said.

The Mumbai-based refiner and energy explorer is considering bidding for a 4,000-megawatt coal-fired plant in eastern India that may cost as much as Rs 16,000 crore ($3.4 billion ), according to officials briefed on the plan, who declined to be identified before a decision is taken. One megawatt is enough to power about 200 middle-class homes in India.

India’s government has invited bids for a 4,000-mw project in Chhattisgarh by July 5 and another in adjoining Orissa by July 30. Reliance may seek to build the Chhattisgarh plant, one of the officials said on Wednesday. A company spokesman didn’t reply to an e-mail seeking comments.

Reliance’s plan to start power generation follows a June 11 decision to buy a wireless Internet services company for $1 billion as it seeks to expand beyond refining oil, making chemicals and natural gas production. The diversification became possible after billionaire chairman Mukesh Ambani ended a non-compete agreement with his brother Anil Ambani on May 23.

“Power is a natural area of diversification for Reliance after the no-compete agreement ended,” said Apurva Shah, head of research at Prabhudas Lilladher, Mumbai. “They have the skills to execute large projects and the money to fund it.”

The operator of the world’s biggest refining complex and India’s largest natural gas field had outstanding debt of about Rs 62,500 crore ($13.4 billion) and cash and equivalents of Rs 21,870 crore as of March 31, the company said in April. Reliance is in talks with banks to borrow $1 billion, two people with direct knowledge of the matter said on June 4.

The world’s richest brothers split India’s second-biggest business empire five years ago after their father died in 2002 without leaving a will and squabbled as their business interests collided . Under the 2005 agreement, Mukesh, 53, kept the petrochemicals, oil and gas units and Anil, 50, got the power, financial services, telecommunications, and entertainment units.

Reliance Power, a company run by Anil Ambani won three of India’s four so called ultramega-power projects, of 4,000mw each, auctioned by the government so far. The government plans to bar companies from bidding to build more than three such power plants at a time to ensure their timely completion, HS Brahma, then power secretary, had stated on January 15. The government proposes to build nine such plants to help almost double the country’s installed generation capacity in the next seven years.

Reliance Industries fell 0.8% to close at Rs 1,057.95 in Mumbai trading, its first decline in six days. The shares have lost 1.3% in the past year compared with a 17% increase in the benchmark Sensitive Index of BSE.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/power/RIL-likely-to-bid-for-mega-power-plant/articleshow/6057239.cms

Mukesh Ambani-controlled Reliance Industries Limited (RIL) announced its sixth oil discovery in exploratory block CB-ONN-2003/1 (CB 10 A&B), awarded under the NELP-V round of exploration bidding.

The well CB10A-T1 was drilled to a total depth of 1500 meters in Part A of the block, with the objectives of exploring the play fairway in the Miocene Basal Sand (MBS) of Babaguru Formation as well as the Oligocene play of Tarapur Formation. The Hydrocarbon bearing zone was identified from 1390-1402.5m in the Miocene Basal Sand (MBS) of Babaguru formation. Conventional production testing was carried out in the interval 1390-1395 m. The well flowed at a rate of 415 barrels of oil per day (bopd), through a 6-mm bean with a flowing tubing head pressure of 290 psi.

The discovery is significant as this play fairway is expected to open more oil pool areas, leading to better hydrocarbon potential within the block. The block CB-ONN-2003/1 is located at a distance of about 130 kms from Ahmedabad in Gujarat, in the Cambay basin. The block covers an area of 635-sq km in two parts, viz. Part A & Part B. RIL, as Operator, holds 100% Participating Interest (PI) in the block.

While the entire block was covered with 2D seismic, about 80% of the block area has 3D seismic coverage. Of the 16 exploratory wells drilled in the block by RIL so far, 12 are located in Part-A and the remaining 4 in the Part B of the block. RIL is continuing further exploratory drilling efforts in the block.

The discovery, named ‘Dhirubhai–49’, the sixth oil discovery in the block so far, has been notified to the Government of India, and to the Directorate General of Hydrocarbons. The potential commercial interest of the discovery is being ascertained through additional data gathering and analysis.

The discovery supplements the understanding of the petroleum system in the Cambay basin in general, and the block in particular. Based on the interpretation of the acquired
3D seismic campaign in the contract area, several more prospects with upside potential have been identified at different stratigraphic levels.

Source:http://news-views.in/ril-makes-sixth-oil-discovery-in-block-cb%E2%80%93onn%E2%80%9320031/

Reliance Industries Limited (RIL) today announced that it has entered into an agreement to acquire a substantial stake in Infotel Broadband Services (P) Ltd, which has emerged as a successful bidder in all the 22 circles of the auction for Broadband Wireless Access (BWA) Spectrum conducted by the DoT. RIL will invest about Rs 4,800 crore by way of subscription to fresh equity capital at par to be issued by Infotel Broadband. Post this investment, RIL will own 95% of the equity and Infotel Broadband will be a subsidiary of Reliance Industries Limited.

RIL sees the broadband opportunity as a new frontier of knowledge economy in which it can take a leadership position and provide India with an opportunity to be in the forefront among the countries providing world-class 4G network and services. A single 20 MHz TDD spectrum when used with LTE (Long Term Evolution) has the potential of providing greater capacity when compared to existing communication infrastructure in the country.

India has witnessed substantial growth in the mobile subscriber base over the last decade. This provides a ready platform for offering various data services which is currently at a very nascent stage. Diverse data services and rich contents have significantly boosted data traffic in developed and other emerging markets. Data communication volume per user has been growing exponentially in the last few years, with the spread of advanced services, and a richer line-up of contents.

RIL’s initiative will usher in a wireless broadband revolution in both, the urban and the rural areas all across the country by providing end-to-end data solutions for business enterprises, social organizations, educational and healthcare institutions and Indian consumers. This will give a fillip to rural upliftment by seamlessly connecting information and markets to the rural population on a real-time basis and will help bridge the rural-urban divide in terms of access to knowledge and information.

RIL plans to create world class state- of-the-art technology using an asset light strategy. RIL will forge several strategic relations with a host of leading global technology players, service providers, infrastructure providers, application developers, device manufacturers and others to leapfrog India to the 4G revolution.

RIL will comply with the non-compete and trademark agreements entered into at the time of corporate demerger and subsequent modifications made last month.

Commenting on the initiative, Mr. Mukesh Ambani, Chairman and Managing Director of Reliance Industries Limited said “We see this as the next wave of value creation opportunity in the wireless broadband space. We believe this will pole-vault India’s economy into the digital world at an accelerated pace while creating next generation tools that will enhance productivity and create world-class consumer experiences.”

Source:http://news-views.in/ril-aims-to-usher-in-broadband-revolution-in-india/

The board of Reliance Industries (RIL) is believed to have approved plans to enter the Indian telecommunications sector when the opportunity arises, two persons familiar with the development told ET.

India’s largest private sector company is expected to go for only the lucrative corporate bandwidth market, or the business of selling telecom and internet services to companies rather than individuals.

It is likely that the company could unveil its intent to foray into telecom at its annual general meeting on June 18, the people familiar with its plans said.

The government is currently auctioning frequency spectrum for broadband wireless access, or WiMAX, a technology that speeds up internet access and RIL is likely to set up a special purpose vehicle (SPV) to acquire one of the winners.

The RIL board met recently to endorse these plans, says a person who has seen a copy of the resolution passed at the meeting.

It is widely believed in industry circles that Mahendra Nahata-owned Himachal Futuristic’s arm, Infotel Broadband Services, could be a candidate for acquisition by RIL.

Infotel is currently among the bidders in the broadband wireless auction and is competing with the likes of Qualcomm, Anil Ambani’s Reliance Communications (RCOM), and Bharti Airtel, India’s largest telecom company by subscribers.

“Himachal Futuristic doesn’t have enough money of its own to be bidding,” said a telecom analyst with a domestic brokerage. Infotel’s bid is likely to be backed by Reliance Industries, he added.

Mr Nahata declined to comment on whether RIL or any of its arms intended to buy the company. The RIL spokesman declined to comment on the company’s future telecom plans.

The bid price for all-India spectrum was Rs 12,257 crore at the end of 110 rounds of bidding on Wednesday. Bidding for Delhi, Mumbai, Kerala and Himachal Pradesh is still on while there is a surplus spectrum slot in eight service areas. Nearly 37% of the bid amount for spectrum for all circles in India is from areas that are still under contest.

Source:http://news-views.in/ril-drawing-up-plans-to-foray-into-telecom-space/

Reliance Industries, freed from its non-compete agreement with the Anil Dhirubhai Ambani Group (ADAG) that barred it from investing in high-growth sectors, is likely to make its first big-ticket investment in coal-fired power plants.

RIL, which is looking to invest surplus cash, is likely to settle on coal-based power plants thanks to the surging demand for electricity and the attractive rates of return, a person familiar with the group’s thinking said.

An RIL spokesperson declined to comment on the issue.

As part of the peace formula announced by RIL and ADAG two weeks ago, the non-compete agreement signed between the two companies in 2005 was scrapped, allowing Mukesh Ambani’s group to enter power, telecom, and financial services. The deal also gave ADAG the freedom to enter the petroleum, refining, and petrochemicals sector.

RIL’s possible entry into the power sector could throw up the intriguing possibility of the two brothers going head-to-head for the first time. But there is unlikely to be a clash as ADAG is already implementing two large power projects and may not be in a position to bid aggressively for more, the person said.

RIL is unlikely to enter the telecom sector, which has seen a steady fall in margins and rising competitive pressures, unless it can find a new-generation technology that will be capital efficient, the person said. He did not, however, rule out the possibility of RIL acquiring an existing telecom company. As far as financial services are concerned, RIL is unlikely to get into the space immediately as the market is still evolving, he added.

The company is clear that among the three new sectors open to it, power is the most lucrative and the challenge will lie in developing plants in record time and with the best technology. “The challenge is to come in before demand starts petering out, which is in the next six to seven years. We will have to build the plant within three years if the normal practice is five years and most importantly, we have to adopt cost-effective technology like clean coal to maximise the returns,” the person added.

The rationale is simple. The sector has a demand-supply gap of 14%, requiring capacity addition of 90,000-100,000 mw every five years, and power-generating companies rake in a healthy rate of return of around 20% on an average. The company would have to become a player within the next three years or else would miss the bus, the person said.

As the second-largest growing economy, India is still far below global standards in electricity capacity. China, for instance, adds 100,000 mw of capacity every year to fuel its economy.

RIL may have preferred to get into the gas-based clean power sector since it is the largest gas producer. But having reserved that sector for ADAG for the next 12 years, the company is looking at cashing in on mega coal-based power projects.

Source:http://news-views.in/coal-to-power-rils-future-ambitions/

Reliance Industries (RIL) Chairman and MD Mukesh Ambani, in an address to RIL’s shareholders, said RIL would continue to follow its successful strategy and focus on improving its portfolio, increasing efficiency, product innovation and expanding its businesses in order to get closer to key markets.

Ambani said within a year of start of gas supply from KG D6, the supply has been ramped up to over 60 million standard cubic metres per day (mscmd) of natural gas and 35,000 barrels of crude oil per day.

“Increased availability of natural gas has resulted in higher volume and cheaper cost of indigenously produced fertilisers, thereby saving the country Rs 4,000 crore per annum in subsidies. It has also resulted in a significant improvement of 30 per cent in gas-based power generation in the country and the replacement of more expensive liquid fuel for refining, steel and petrochemical industries,” Ambani said in a statement in the annual report.

Mukesh AmbaniDuring the year, RIL achieved a turnover over Rs 2,00,000 crore or $44.6 billion and its net profit increased to Rs 16,236 crore ($3.6 billion).

The company announced a dividend of 70 per cent amounting to Rs 2,430 crore ($541 million), including dividend distribution tax.

RIL’s exported products were worth Rs 1,10,176 crore ($24.5 billion) against Rs 89,199 crore in the previous year. Its exports, which represent 55 per cent of RIL’s turnover, were to 123 countries.

Petroleum products constitute 85 per cent and petrochemicals account for 15 per cent of the exports.

During the year, the Petroleum Trust sold 88.8 million equity shares (adjusted for bonus issue) of the company and realised Rs 9,334 crore. As on March 31, RIL’s debt was at Rs 62,495 crore ($13.9 billion).

The company’s cash and cash equivalents as on March 31 amounted to Rs 21,874 crore ($4.9 billion). These are placed in bank fixed deposits, certificates of deposits, government securities and bonds, it said its annual report.

Source:http://news-views.in/ril-to-expand-business-in-key-markets-mukesh/

Russia’s leading petrochemicals group Sibur Holding is planning to join forces with Reliance Industries (RIL), India’s top private sector company, to produce synthetic rubber in India.

Moscow-based Sibur and Reliance Industries (RIL) of Mumbai, India have signed a preliminary agreement to form a joint venture butyl rubber plant at Reliance’s integrated petrochemicals complex in Jamnagar. The partners aim to feed Asia’s rapidly growing rubber consumption, led mainly by the expansion of automotive tyre manufacturing.

Under the terms of a memorandum of understanding the firms signed, Sibur will provide proprietary technology for butyl rubber polymerization and its finishing. Reliance is to contribute a new raw materials unit and the necessary infrastructure, the partners said in a joint statement.

“The creation of new capacity in close proximity to the Asian markets provides both Sibur and Reliance with exciting opportunities. Rubber consumption in Asia has shown strong growth in recent years,” commented Sibur’s president Dmitry Konov.

A Reliance spokesman said the move was “the right step towards strengthening the company’s position in the Indian market of synthetic rubber” as well as “an important step” in implementing the elastomers strategy formulated by its chairman Mukesh Ambani.

The Indian group has recorded an annual profit equal to $6.2bn on sales equivalent to more than $44bn as of March 2010.

Sibur manufactures 23% of all propylene and polypropylene, 17% of all polyethylene, 30% – 49% of different synthetic rubbers and 34% of all tyres in Russia.

Source:http://news-views.in/sibur-joins-forces-with-ril-in-indian-rubber-deal/