Reliance Industries plans to invest Rs1.5 lakh crore over next three years

Reliance Industries (RIL) plans to invest Rs1.5 lakh crore (US 251 billion) across its energy, petrochemicals and telecom businesses over the next three years, Chairman Mukesh Ambani said at the company’s 39th annual general meeting in Mumbai on June 6.
The company plans to increase capacity at its existing petrochemical plants and build new ones, drill more wells to boost flagging oil and gas production, open more retail stores and introduce high-speed broadband service, he said.
“We are committed to… making significant investments in all five businesses simultaneously – exploration and production, petroleum refining and marketing, petrochemicals, retail and 4G,” Ambani told shareholders.
Ambani said, “We have now commenced our exploration campaign in the East Coast of India. Our first success has been achieved in the MJ1 well in KG-D6 block.” This comes when output at its flagship KG-D6 fields dipped to an all-time low of less than 15 million standard cubic meters.
He went on to say, “We are all set to proceed with the development of two coal bed methane blocks in Sohagpur, Madhya Pradesh…. We are awaiting approvals to build a pipeline to connect to the major pipeline grid of the country…. We target for first gas from these fields in 2015.”
Ambani was very bullish on its shale gas acreages in the U.S. “Our U.S. shale gas business has more than doubled its revenues…. Production from shale gas will be in excess of one-third of our aggregate production this year,” he said.
RIL is a partner in the shale resource base of Marcellus and Eagle Ford Shale gas plays in the U.S., through its three joint ventures with Chevron, Pioneer and Carrizo. RIL is among the largest foreign investors in the shale gas business in the U.S., with investments exceeding US$5.7 billion as of March 31, 2013.
RIL is also looking at making partnerships with other nations. Ambani said, “RIL will be signing a memorandum of understanding with Petroleos de Venezuela, the state-owned company, to evaluate opportunities to participate in development of heavy oil fields in Orinoco Oil Belt in Venezuela.”
On interests in Iraq, he said, “We have been pre-qualified by the Iraq government to bid for the Al-Nasiriya Integrated Project for development of upstream oil fields and construction and operation of a 300,000-barrel-per-day petroleum refinery in Iraq.”
RIL is not just expanding in the crude oil industry. Ambani said the company has undertaken the single-largest expansion in the petrochemicals sector in the world. “In polyester, we are expanding our capacity by 1.5 million tons per year to reach 4 million tons per year. The polyester filament yarn plant at Silvassa will be commissioned during the first half of the current financial year. This will be followed by the PET resin plant in the second half of this financial year at Dahej, making us the seventh-largest producer of PET in the world.”
Describing petrochemicals as the foundation of Reliance’s growth strategy over the last 35 years, he said petrochemical capacity will increase from 15 million tons per year to 25 million tons.
Then there is the retail sector to consider. RIL operates nearly 1,500 stores in 130 cities under its retail business that sells consumer goods, including apparel, food and electronics, and it is India’s second-biggest retailer behind Kishore Biyani-led Future group. Aiming to make consumer business a growth engine for Reliance Industries, Ambani said the group’s retail venture is eying 50% growth in annual revenues.
“We added 184 stores across [the] format sectors market. I am confident that our retail business would undertake multi-fold growth in the next few years…,” he said.
(June 8, 2013)