29th March 2010 saw the Chairman of the largest private sector company in India, Reliance Industries Ltd., the flagship concern of the Reliance Group, passing on his pearls of wisdom to the next generation of powers-that-be graduating from an institute declared to be among the top business schools in the world. The occasion was the 35th convocation ceremony of the Indian Institute of Management, Bangalore (IIMB) and business tycoon and proud alumnus, Mukesh Ambani, graced the occasion with his Chairman’s Address.

Mukesh Ambani observed that the world is emerging from a severe economic shock and resetting itself to face newer economic realities with India being one of the first countries to recover. This fact confirmed his belief that the economic centre of gravity is slowly shifting to Asia and the 21st century is poised to be an Indian one.

Mukesh Ambani believes that currently, opportunities are many and must be seized effectively and in time. Leadership in all walks of life is the only way to achieve this goal. Fervently, he told his eager audience that they were graduating at the most appropriate time for shaping a new and resurgent India as the power of youth will be centric to the chiseling of the country’s future. However, he also cautioned that the competition for Indian graduates will be more and more global as an increasing number of professionals from other countries are aspiring to work here.

He reminisced that when he graudated from IIMB thirty years ago and entered the economy, the opportunities before him were not even a fraction of what each of the students present had before him. He pointed out that these students were the privileged ones to be part of this new and fascinating India. “A new brave world lies ahead of you. For that we have to be fearless and take on the world,” were his motivating words.

The CMD of Reliance Group, Mukesh Ambani eulogized India’s space and technology endeavors. Quoting India’s first Prime Minister, Pandit Jawaharlal Nehru, he said, “The future belongs to science and to those who make friends with science”. He spoke extensively on how the country’s space and technology endeavors played the catalyst in bringing about rapid change in all spheres of life. He raved about how at a budget that was barely 3% of NASA’s, India is the role model to the world in space applications – it is one of six countries with the capability to make satellites and launch them from its own soil; one of four that demonstrated capability for re-entry of spacecraft from space and the facilitator for a major discovery of water molecules and water ice on the lunar surface.

He recommended that the priority of space-based applications should be to contribute towards the national endeavours in food and water security, weather and climate, environment and ecosystem, education and health care, skill development, rural communication, infrastructure development, disaster management support, smart governance, sustainable development and related national imperatives. Furthermore, they should become part of the value chain of the user community.

Entering the arena of commercial quality and efficiency, Reliance Group’ Chairman affirmed that the ability to adopt low carbon operations as well as sustainable business practices will be one of the key determinants for successful businesses in coming years.

In conclusion, Mukesh Ambani encouraged the students to dream and ideate. He advised them to always keep the economic dimension of time in sight while making decisions and inculcate a spirit of leadership. He advised them to develop strength of character above all else and contribute to uplift the society they live in while they move up the ladder of corporate success.

Source:http://www.reliance-news.com/mukesh-ambani/mukesh-ambani-sees-an-indian-century-ahead-2/

Reliance Industries Ltd has zeroed in on Singapore-based infrastructure firm InfraCo to offload 45 per cent stake in its Jhajjar SEZ. Spread out over 25,000 acres, the Rs 30,000-crore project located in Haryana is majority-owned by RIL, with 10 per cent held by the Haryana State Industrial and Infrastructure Development Corporation.

If the deal goes through, RIL’s holding in the project will come down to 45 per cent. FE was the first to report RIL’s in-principle decision to offload stake to a strategic partner for capital support. This would be the first time the Mukesh Ambani-led company inducts a partner for holding a major stake in any of its ventures.

The induction of InfraCo is strategically important for RIL, as the Singapore-based company has the ability to share risks associated with the infrastructure project, as it would take years for its income streams to turn robust. InfraCo funds early-stage, high-risk costs by taking an equity stake in the project and making decisions that will lead to socially responsible and successful construction and operation. In the past, IL & FS and Mitsui have also reportedly been in the fray for a strategic stake in the venture. RIL has sought Haryana’s permission to convert part of the project into an industrial model township, as it sees potential in the project as a real estate venture rather than a complete SEZ given various tax complications.

Source:http://www.indianexpress.com/news/InfraCo-may-buy-45-per-cent-in-Reliance-s-Jhajjar-SEZ/609620

Reliance Industries Ltd (RIL), India’s largest private sector company, has invested an undisclosed sum in Deccan 360, the cargo airline venture floated by aviation entrepreneur Captain G R Gopinath. Reliance Industries has made this investment through a wholly owned subsidiary, a company statement said.
RIL’s stake in Deccan 360 is expected to be above 26% but below 50%. Two RIL representatives will be on the board of the cargo venture. A Reuters report pegs the investment by Reliance at $20 million to $30 million.

Commenting on the initiative, Mr. Mukesh Ambani, Chairman & Managing Director, Reliance Industries Ltd. said, “We believe that our collaboration with Deccan 360 will see a transformation in the logistics domain in India. I have full faith in Capt. G.R. Gopinath and his team to make this a big success. We are sure that this initiative will propel the customer experience to the next level in India in the logistics domain.”

On the occasion, Capt. G.R. Gopinath, Chairman & Managing Director said, “Deccan 360’s strategic partnership with Reliance will enable us to realize our dream faster – a dream of creating world class logistics reach to every nook and corner of India. Our air and surface network would open up backward reaches of India and integrate these with the Metros. We all know that supply chain is the lifeblood of a country’s economy. This logistics capability will help setting up both small scale industries & large manufacturing centers wherever resources are available and in turn reduce cost of the product and expand the consumer base. For an existing business, an efficient, just-in-time supply chain will reduce business cycle and help reduce manufacturing cost in turn making India a globally formidable economy.”

Deccan 360 is the first logistics company in India to adopt and develop a hub and spoke model. Deccan 360 has appointed National Service providers on a franchisee model and has already set up over 80 service centers and 8 surface hubs to service the operations. It has currently deployed 8 freighter aircrafts, covering 15 airports, with a fleet of over 300 trucks and 850 vehicles nationwide. It has a capacity of more than 300 tonnes per night by air, with over 60 warehousing hubs, delivering overnight services to 50 cities, all driven by 60 plus franchisee nationwide. Deccan 360 has integrated a multi modal capability ensuring clock-work precision in its operations and offers a never before reach.

By acquiring more than 26% in Deccan 360, RIL seems to be exploring the high potential of logistics business, especially in air cargo to strengthen its retail business, where it is gaining traction. It’s a win-win deal, said an aviation analyst, who did not wish to be quoted. For RIL, it means synergies with its retail business, which can benefit from a presence in the logistics space while Deccan 360 brings on board a marquee strategic investor.

Source:http://ril.com/downloads/pdf/PR16042010.pdf

Indian energy giant Reliance Industries will pay $1.7 billion to form a joint venture at one of the most promising natural gas deposit regions in the U.S. with Atlas Energy, becoming the latest foreign company to invest in shale plays that are expected to be very lucrative.

Reliance, controlled by billionaire Mukesh Ambani, has been working hard to expand its presence outside India, break into new markets and broaden its various businesses including refining, oil and gas exploration and petrochemicals.

India’s largest listed firm will pick up a 40 percent stake in Atlas’s operations in the booming Marcellus Shale — a gas project that spans parts of Pennsylvania, West Virginia and New York in the United States and which, according to some geologists, could hold enough natural gas to satisfy U.S. demand for a decade.
With this move it joins a number of international oil companies including BP Plc, Total, Statoil and Mitsui & Co who have bought into shales, rock formations that could hold vast amounts of natural gas.

While the shale formations have proven to be lucrative, they are also very expensive to develop and environmentally sensitive. The joint ventures have given the independent oil companies who own much of the acreage in these areas access to capital and should allow foreign oil companies to pick up expertise in new drilling techniques developed for the shales.
“This marks Reliance’s foray into a totally new venture altogether. Reliance is going to generate a lot of cash flows going ahead and investments in shale gas could be a good growth opportunity,” said Deepak Pareek, oil and gas analyst with Angel Broking.

Reliance Chairman Ambani, who according to Forbes is the world’s fourth-richest man with a net worth of $29 billion, has made no secret of the firm’s overseas ambitions as the company has raised a war chest of $2 billion by selling stock in recent months.

But Reliance, founded by Ambani’s father Dhirubhai, a school teacher’s son, had not met with much success until now in its foreign takeover attempts.
Bankrupt petrochemicals firm LyondellBasell recently rejected a bid from Reliance that valued the target at about $14.5 billion, and the Indian firm also lost a race for Canadian oil sands firm Value Creation, in which it wanted to take a majority stake for $2 billion.
Shares in Reliance closed up 1.8 percent on Friday, while the Mumbai market rose 1.2 percent.

Atlas Energy shares jumped $6.44, or 20.3 percent, to $38.25 on the Nasdaq on Friday.

Shares of other companies with acreage in the Marcellus Shale, including Exco Resources and Range Resources, were also boosted by the news.
More joint ventures in the region can be expected to follow, bankers said. Exco, in particular, should be closely watched. Chief Executive Doug Miller said in February that the company was in discussions for a potential joint venture with its acreage there.
JOINT VENTURE

Atlas’s core Marcellus position consists of about 300,000 acres, largely in southwestern Pennsylvania, out of which about 120,000 acres will go to Reliance, the companies said.
Upon closing Reliance will pay about $340 million in cash and must also contribute $1.36 billion to the joint venture to develop the shale project, Atlas said in a statement.

Reliance is paying around $14,000 an acre for its share of the Marcellus acreage, which is in line with what Japan’s Mitsui paid for its joint venture with Anadarko Petroleum Corp announced in February [ID:nN16229402]. Still, the price is more expensive than most of the previously announced deals.
The members of Atlas’s management team have a background in finance and are known for their deal making skills, said Marshall Carver, energy analyst at Capital One Southcoast in New Orleans.

Atlas Energy Chairman Edward Cohen is also chairman of Resource America Inc, a publicly traded asset management company, and Chief Operating Officer Richard Weber was head of energy investment banking at KeyBanc Capital Markets from June 1997 to March 2006.
“This deal was certainly done at a good price” for Atlas, Carver said.

Atlas will serve as the development operator for the joint venture, and will retain a 60 percent undivided interest in the acreage.
Reliance will have the option to buy 40 percent in all new acreages, and also has the right to first offer for potential future sales by Atlas of about 280,000 additional Appalachian acres controlled by the U.S. firm.

Debate over drilling in the region has sharpened in recent months. Environmentalists claim the drilling fluids needed to crack the rock and free the gas can contaminate drinking water, an assertion the industry hotly disputes.
Jefferies & Co was the lead financial advisor, while J.P. Morgan Securities was another advisor to Atlas.

Barclays advised Reliance on the deal, which is expected to close by the end of April.

Source:http://www.nytimes.com/reuters/2010/04/09/business/business-us-reliance-atlas-marcellus.html?_r=1

Mukesh Ambani led Reliance Industries has informed oil regulator DGH that four smaller gas finds surrounding the D-1 and D-3 fields in the Krishna-Godavari basin can be commercially exploited.

RIL on February 19 informed the oil regulator Directorate General of Hydrocarbons (DGH) that four smaller gas finds, surrounding the D-1 and D-3 fields, which are currently producing around 62 mmscmd of gas, can be commercially exploited, sources in know of development said.

RIL estimates that four smaller gas finds in the prolific KG-D6 block may contain 1-2 Trillion cubic feet of reserves and may help prolong peak output of 80 million standard cubic meters per day (mmscmd) from the block, sources said.

“These four finds were made in 2008 and RIL had at that time notified them as discoveries. They have now submitted ’Potential Commercialilty Interest’ which means that they can be exploited commercially,” a source said.

Once DGH approves commerciality, RIL will submit a detailed development plan, detailing investment and production potential.

RIL has so far made 25 oil and gas discoveries in KG-D6, of which two – D1 and D3, have been put on production at an investment of $ 8.836 billion. Besides D1 and D3 gas fields and MA oil discovery, nine other gas finds were previously declared commercial and now four more may be added to the list.

In 2008, RIL submitted plans to invest $ 5.91 billion in nine satellite finds but later pruned the list to just four considering government-fixed gas price of $ 4.20 per million British thermal unit did not justify such high additional investment.

The company on December 29 revised this to $ 1.5 billion spanning 0.6 Trillion cubic feet recoverable reserves in the four finds that could produce 10 mmscmd for 6 years.

The remaining five discoveries had been kept for developing at a later date, sources said adding these five and the four finds that are now in the process of being declared commercial may be clubbed together for development.

It will take 4-5 years to bring to production the four finds for which field development plan (FDP) has been submitted and the other finds may not come into production before 2016 by when D1 and D3 output would have hit decline phase.

The discoveries would be tied-up with Dhirubhai 1 and 3 (or D1 and D3) production facilities, which are designed to handle 80 mmscmd of output.

Sources said the mining licence for most of the 1.9 million acres of KG-DWN-98/3 or KG-D6 block has expired that it would need extension from the government to do additional exploration work.
The mining lisence expiry, however, may not impact the approved commercial finds which would be more governed by the field development plan approved by the DGH and the government.

Source:http://beta.thehindu.com/business/article392880.ece

Reliance Solar, the solar energy initiative of Reliance Group, has successfully executed and commissioned India’s first one-megawatt (MW) solar plant to power Thyagaraj stadium to be used in the upcoming Commonwealth Games 2010. The Thyagaraj Sports Complex is a model Green Stadium with world class facilities in India and will host NetBall in the upcoming Commonwealth Games. The solar power generated through 1 MW solar PV power plant at the Thyagaraj Stadium is expected to result in emission reduction of more than 1,200 tons of carbon dioxide (CO2) per year thereby setting a benchmark in terms of energy efficiency.

In addition, building-integrated photovoltaic concept is also implemented by Reliance Solar Group. So, the stadium can start feeding electricity to the grid. The good news is, henceforth, this power will be made available for public consumption, except during the period when the Games take place in October. The Government of Delhi is already in talks with NDMC, BSES and PWD to sell the electricity thus generated, for consumption. KK Sharma, principal secretary (PWD) said, “The amount of solar power generated is substantial, and we wanted to utilize the power plant properly, especially as around 1MW of power will be generated every day, depending on the weather.”

Reliance Solar Group installed and commissioned the country’s first 1MW solar plant in a record duration of less than 3 months. The power plant is expected to generate around 1.4 million units of electricity per year. It would cater to the power requirements of the stadium and the surplus would be fed to the grid at 11KV. Reliance Group has also implemented three 2.6 KWp solar PV power plants on the roofs of individual tennis courts in the R K Khanna Tennis Complex, which will play host to the tennis event during the games. Further, there are 34 back-up solar PV systems of 3 KWp each along with 180 solar LED street and 500 garden lights in the Commonwealth Games Village, which will house athletes, coaching and support staff.

Commenting on the achievement, Mr. Mukesh Ambani, Chairman & Managing Director, Reliance Industries Ltd. (RIL) said, “We have always believed that the renewable energy space is a natural extension of our strengths in the conventional energy platform. The nature of technical expertise and project execution demonstrated in developing the solar power infrastructure is a defining achievement for our Solar Group. We will continue our efforts in research, understanding and scaling up the deployment of these environment friendly sources of energy. Reliance Industries is privileged and honored to work with the Government of Delhi and Organizing Committee and be an integral green part of a show case event like the Common Wealth Games 2010.”

Important facets of the 1MW solar PV plant at the Thyagaraj Stadium include:

• A kalzip type roof that minimizes the use of mounting structures in the system
• A total of 3,640 no of 280Wp modules with one of the highest efficiency of 14.1% have been used in the project.
• The entire system has been installed within a roof-space of 10,000 sq. m. (2.5 acres).
The inverters and power evacuation systems used in the project are the best in class and have been executed by partnering with leading global companies to ensure best quality and results.

Source:http://news-views.in/reliance-solar-to-power-the-common-wealth-games/

Feasibility study of algae as an alternate feed stock for biofuels should be undertaken as a part of meeting challenges for biofuels in India, a top Reliance Technology group official has said. He adds that algae oil can be used to make bio-diesel or other refinery feed stocks.

“Algae seems to be the most promising feed stock. Microalgae are uncellular biofactories that can provide oil from sunlight and carbon dioxide,” M. Ganapati, President, Corporate Planning, Reliance Technology Group told PTI after delivering a talk on ‘Biofuels Scenario in India’.

Algae oil can be used to make bio-diesel or other refinery feed stocks, he said. “Critical Research and Development objective should be to promote premium quality fuel from Algae at a cost competitive with petrol and diesel,” Mr. Ganapati said.

Mr. Ganapati also hinted at RIL considering a proposal on setting up of a biofuel refinery. He also said that the government should offer tax incentives and selective investment grants to biofuels which will facilitate the update of biofuels. He stressed the need on required dedicated R&D for the development of second generation biofuels. “There should be demonstration of technology for second generation biofuels. Another factor for meeting challenges in biofuels is availability of feed stocks, collection storage, logistic Jatropha plantation, high yield variety development and harvesting, technology among others,” Mr. Ganapati added.

Source:http://beta.thehindu.com/sci-tech/science/article390600.ece

Natural gas from Reliance Industries’ prolific D6 field has generated savings worth thousands of crores of rupees for power and fertiliser companies, the main users of the gas.

Commercial production from the field in the Krishna Godavari (K-G) basin started on April 2 last year.

The gas-based power industry is estimated to have saved Rs 6,000 crore over the last year, while the government’s fertiliser subsidy bill is estimated to be lower by Rs 3,100 crore.

Users within the country could get gas from the D6 field, located off the Andhra cost, at a landed cost of $ 4.2 per million British thermal units (mBtu). This price was much lower than alternates like imported liquefied natural gas (LNG), the price of which touched over $20 per mbtu. It was, however, higher than the subsidised price at which the government sold gas to select customers.

NTPC, the country’s largest power producer, could reduce its pricey LNG imports as domestic gas became available. The power sector, the biggest consumer of K-G gas, was sold about 18 mscmd of gas, used across 4,745 Mw of power capacity.

According to industry experts, the cost of generating power from naphtha, assuming a naphtha price of $10 per mBtu, would be Rs 3.97 per unit, while the cost of generation from KG-D6 gas assuming a delivered price of $6 per mBtu would be Rs 2.50 a unit. “Depending on the current price of naptha (which is an alternative feedstock), the power sector is estimated to have saved about Rs 6,000 crore while using gas as feedstock,” said Rakesh Jain general manager (energy division) at Feedback Ventures.

These savings have gone to the pocket of the consumer, according to Jain, since most producers have agreements with the state power utilities to simply pass on the cost of fuel to the consumers.

The average saving to a household in Andhra Pradesh, a state which houses some of the plants to which the D6 gas has been allocated, would be as much as Rs 300 per month, according to industry experts.

This is assuming an annual power consumption of 2,448 kilowatt hour.
The fertiliser sector also benefitted, as it switched to gas.

“It has been a very good experience. The supplies have been stable, leading to smooth operations, and we did not use any naphtha (as fuel) in the past one year. The subsidy saving to government from our plant alone is around Rs 100 crore,” said Kapil Mehan, executive director, Tata Chemicals.

The company is using 0.88 million standard cubic metres a day (mscmd) of K-G gas at its fertiliser plant in Babrala (Uttar Pradesh). The total gas supply to fertiliser sector during 2009-10 was 12.24 mscmd, which translated to a production of 6.10 million tonne of urea.

The D6 field is currently producing 60 mscmd of gas.

The government, through its gas utilisation policy, has made allocations to various priority sectors like power, fertiliser, steel, city gas, refineries, petrochemicals, LPG and captive power.

The power sector has been allocated 31.165 mscmd of gas on a firm basis and another 12 mscmd of gas on fallback basis. The fertiliser sector has been given firm allocation of 15.508 mscmd, refineries have been given 5 mscmd of firm allocation and 6 mscmd of fallback allocation and the steel sector has been given 4.19 mscmd firm allocations.

A fallback allocation implies that the sector will get gas if the firm allocation of other sectors is not fully consumed due to some reason.

Source:http://www.business-standard.com/india/news/power-fertiliser-firms-reap-gains/390496/

The Government intends to review the allocation of Reliance’s gas produced from the Krishna Godavari (KG) Basin D6 field. It could re-fix allocation as per the amounts drawn so far by the customers.

Ministry officials told Business Line that the Petroleum Secretary, Mr S. Sundareshan, had conducted a review meeting recently on off-take of KG gas by the allottees.

He is understood to have asked them to come back in a fortnight’s time with details on their off-take, and how much they can actually absorb.

A final view will be taken in mid-April, based on which a decision will be taken on the unused quantity. If necessary, a decision on re-allocation could be also considered, officials said.

Asked if there were any penal provisions in the Gas Sales and Purchase Agreement (GSPA) that Reliance has entered into with these customers for non-drawal of gas, sources said “no penal provisions have been provided for non-drawal of gas by the consumers during initial six months of the supply.”

RIL is currently producing 60-62 mscmd of gas, which has been allocated to identified customers from the priority sectors — power, fertiliser, steel, city gas distribution, gas-based LPG plants, petrochemicals sector, and refineries — based on a decision of an empowered group of ministers.

Mukesh Ambani led Reliance Industries, which had planned to ramp up its production to 80 mscmd by March, claims that for want of customers and choked pipeline network, it has not been not able to do so.

Source:http://oilandgasindia.blogspot.com/2010/03/govt-to-review-reliances-gas-allocation.html

India’s top privately run refiner Mukesh Ambani led Reliance Industries is expected to raise crude oil imports by about 22 percent this year as it ramps up production at its giant complex, further stamping its mark on world markets.

To maximise profit margins with its sophisticated refining capability, Reliance Industries is also set to limit African crude imports this year in favour of Middle East grades, if light crude prices continue to strengthen against heavy-sour grades, traders and analysts said.

“I expect Reliance refineries to run at full steam, even if in between there is a small shutdown, they can easily run at about 65 million tonnes,” said a trader familiar with refining operations. Reliance declined comment on traders’ estimates.

This means that the company’s two refineries — the largest facility in the world — will run above their full combined capacity of 1.24 million barrels per day (bpd), higher than last year when its second plant began operating at full rate in the second half.

After the world first saw increasing flows from Reliance in the summer of 2008, with the start of its new 580,000 barrel-per-day (bpd) plant, this year will see the full blast of exports of high-value diesel and gasoline made from a diverse slate of the cheapest available crudes.

Source:http://economictimes.indiatimes.com/news/news-by-industry/energy/oil-gas/Reliance-to-tighten-grip-on-world-fuel-markets/articleshow/5746150.cms