Reliance eyes ME oil stakes
New Delhi, June 13, 2007
India's biggest private sector refiner, Reliance Industries Limited, is looking to buy stakes in refineries in the US and the Middle East to expand its operations abroad, a top company official said.
Reliance, which has a market value of $58 billion, is also scouting for exploration blocks in Peru and Colombia, PMS Prasad, CEO and president of the company's oil and gas business, told reporters on Tuesday.
The energy company already has exploration blocks in Yemen and Oman.
Reliance operates a 660,000 barrel-a-day refinery, India's largest, in the western state of Gujarat, and is building another 540,000 bpd unit nearby to feed the country's robust demand for energy and for export.
Prasad said there were opportunities overseas to expand its refining expertise, but he declined to give financial details or identify likely targets.
'We are looking at the US and Middle East,' he said. 'Various companies are rationalising their portfolios. We have expertise in operation, expansion and upgradation.'
Reliance is not interested in any of the refineries of Chevron Corporation and Royal Dutch Shell, but is open to refinery upgrade projects in Iraq, Prasad said.
He said Reliance had submitted bids for exploration blocks in Australia, along with oil and gas producer Santos.
'We have an existing pact with Santos, and now we have bid for two-three blocks in Australia in the recently concluding exploration licensing round,' he said.
Reliance, which is developing a deep-water gas block in Krishna-Godavari basin on India's east coast, hopes to finalise the price of its gas by end-July, well ahead of production scheduled to begin by mid-2008, he said.
'Gas price has to be ready by July-end. As a rule, we have to ready it 12 months before starting commercial production,' he said.
The gas is expected to flow at a rate of 30-40 million cubic metres a day from July 2008, and will reach a peak level of 80 million cubic metres a day in 2009.
Prasad said Reliance was keen to advance its peak production but was awaiting availability of rigs to drill wells.
'We expect to mobilise five additional rigs between now and September 2008,' he said. Reliance has deployed one rig at the block and plans to move another from a different location.
The company will file the development plan for oil production from the block next month. Initial oil production from the block will be 30,000-40,000 barrels a day and will peak at around 50,000 barrels a day, he said. Reuters