RIL plans power foray for retail biz

The Mukesh Ambani-owned Reliance Industries Ltd (RIL) plans to set up captive power generation capacity of around 4,000MW at an investment of Rs12,000 crore to supply power to the 6,000 outlets that its subsidiary Reliance Retail plans to open.

The Anil Dhirubhai Ambani Group, managed by Mukesh Ambani’s brother Anil Ambani, claims that this violates an existing non-compete agreement between the two business groups.

“The first of these captive units will be set up in Maharashtra,” said an RIL executive, who did not wish to be named.

The captive power units will have a unit size of around 400MW each and will generate power at a tariff of Rs2.60 per unit. RIL is in talks with Siemens Corp., Alstom, Mitsubishi Heavy Industries (MHI) and General Electric for setting up the power generation units.

Read more at Livemint.com

RIL's Maha Mumbai SEZ may get extension

The board of approvals (BoA) for special economic zones (SEZ) is likely to extend tomorrow the validity of in-principle clearance to Reliance Industries' Maha Mumbai SEZ under the new rules that limit its size to 5,000 hectares.

"The extension of validity has been under the new rules that limit the size of a SEZ to 5,000 hectares," a government official said. Reliance had earlier proposed Maha Mumbai SEZ over an area of 10,000 hectares and received in-principle approval for project in August last year.

The amendment to rules notified in March had reduced the validity of in-principle approval to one year from three years previously, but BoA was given the powers to extend the validity by two more years.

Besides the Maha Mumbai project, the BoA, headed by Commerce Secretary G K Pillai, will take up eight fresh proposals. These include five zones for in-principle nod and three for formal approvals. Of these, two relate to Infosys Technologies which wants to set up IT and ITES zones near Hyderabad. The biggest zone coming up for in-principle approval is by Ispat Industries, which wants to set up a 1,012 hectare multi-product SEZ in Maharashtra's Raigad district.

Read more in Business Standard

RIL gets ministry rap for oil retail delay

The petroleum ministry has rapped Reliance Industries for failing to meet its obligations of opening and operating 10 per cent of its petrol and diesel retail outlets in remote and low-service areas.

In its reply to a recent ministry communication to this effect, the company has said that this was because of the government control on prices of auto fuels resulting in losses from the overall fuel retailing business.

RIL, along with private sector companies, Shell and Essar, was given permission to retail automobile fuels in the country in 2002. RIL’s plan was to open almost 5,000 retail outlets across the country, but the company has so far opened around 1,800 retail outlets.

Read more in Business Standard

Reliance KG gas pricing in with Doc

NEW DELHI: RIL’s gas pricing formula, which has been the focus of the ongoing gas debate, is being independently examined by the PM’s Economic Advisory Council (EAC) chairman C Rangarajan.

It is understood the PMO had asked EAC to look into the formula even as the committee of secretaries (CoS) deliberates on the larger issue of pricing and allocation of natural gas.

Senior officials involved in examining RIL’s pricing say the end-price of $4.33 per million British thermal units (mmbtu) is reasonable in terms of prevailing rates of natural gas in the domestic and global markets. But they have some reservations over the formula, devised by RIL to derive the value of the gas. They say almost 97% of the component in RIL’s formula is the fixed component.

Read more at Economic Times

RIL may become India's first $100 bn mkt cap firm

MUMBAI: Reliance Industries, India's most valued firm, may become the first in the country to achieve a market capitalisation of $100 billion, international brokerage and equity research major Morgan Stanley said on Tuesday.

Morgan Stanley's India-based analysts said in a research note sent to the firm's institutional clients that they were raising the consolidated earnings forecasts for RIL in the current and next fiscals.

They also revised upward their one-year price target for RIL shares, while projecting a 35 per cent surge from the current levels in its "base case" scenario.

Morgan Stanley further said in "bull case" scenario, the shares could rise by about 37 per cent, which when translated into market capitalisation would amount to over $100 billion.

Read more at Economic Times

34 Indian firms in Forbes' list

Oil and Natural Gas Corporation leads the pack of 34 Indian companies, a chunk of them from the banking sector, which have found place on the elite Forbes' list of 2000 corporate giants across the world.

In the ranking based on sales, profits, assets and stock market value, there are five oil and gas companies, four software giants, three each dealing in materials and capital goods, two utilities, and one each food, consumer durable, and telecommunications majors.

At the top of the Indian list is ONGC that finds 239 spot in the overall rankings and is followed by Reliance Industries (258), State Bank of India (326) and Indian Oil (399).

Tata Consultancy finds 1047 spot in the overall list but tops Indian companies ranking of software and service outfits. Following it in the category are Infosys Technologies (1130), Wipro (1233) and Satyam Computer Services (1874).

Bharti Airtel is the only Indian telecommunications company to find spot among 2000 giants with a rank of 1149.

State Bank of India Group finds top spot among the Indian banks and is ranked at 326 in the overall list. It is followed by ICICI bank (536), HDFC-Housing Development (1197), Punjab National Bank (1308), Canara Bank (1360), HDFC Bank (1376), Bank of Baroda (1585), Bank of India (1691), Indl Dev Bank of India (1767), Union Bank of India (1772). UCO Bank (1931), Syndicate Bank (1943), Indian Overseas Bank (1946) and

Oriental Bank of Commerce (1974).

In the materials category, Steel Authority of India, Tata Steel and Hindustan Zinc find slots in the coveted list. ITC is the only Indian company to make the list in food, drink and tobacco category. NPTC, TATA Motors, Gail India, Bharat Heavy Electricals, Bharat Petroleum, Larsen and Toubro, Hindustan Petroleum and Bajaj Auto are among other Indian companies that find spot among 2000 top companies.

The first seven top spots go the American companies. Two firms from Netherland and one from Switzerland are among the first ten companies.

The top spot goes to Citigroup and following it are Bank of America, HSBC Holdings, General Electric, JP Morgan Chase, American Intl Group, ExxonMobil (all American), Royal Dutch Shell (Netherlands), UBS (Switzerland) and ING Group (Netherlands).

Forbes says this year's comprehensive list of global super stars values the world's largest public companies, including the hottest companies and best performers across 27 industries.

The 2007 rankings indicate that globalization is the essential element for business to prosper, the magazine says.

China brings 16 new companies to the Global 2000 and the United States has 34 fewer in the list. Among the giants, 116 are oil and gas which pulled down more revenue than any other industry but banks lead in profits.

A highlight of the analysis is that total revenues of the companies headquartered in Switzerland exceed that nation's gross domestic product.

The US companies included on this year's list have a combined market capitalization of 13.9 trillion dollars.

Argentina is represented on the Global 2000 for the first time ever.

Reliance plans two new gas pipelines: Govt

Reliance Industries Ltd, plans to build two gas pipelines in southern India, the government said on Friday, that could help the energy explorer supply gas from its deep-sea fields to retail consumers.

The petrochemicals to oil refiner aims to produce 80 million cubic metres of gas a day (mmscmd) by mid-2008 from its two fields in the prolific Krishna Godavari basin, off the southern state of Andhra Pradesh.

The Oil Ministry said in an advertisement on Friday that Reliance Gas Transportation Infrastructure Ltd., a group firm, had submitted a proposal to lay a 670 km pipeline from Chennai to Tuticorin in Tamil Nadu.

It also wants to build another 660 km pipeline from Chennai to Mangalore in the neighbouring state of Karnataka, via Bangalore, the ministry said.

The advertisements in local newspapers did not disclose the cost of the two projects, and a Reliance spokesman could not give details immediately.

Reliance is already constructing a 1,400 km (870 mile) pipeline to transport natural gas from the deep-sea fields off India's east coast to the western regions of the country.

Earlier this month, P.M.S. Prasad, head of Reliance's oil and gas business, said the company planned to build city gas distribution networks in Tamil Nadu and Karnataka and also in Maharashtra and Gujarat in the west and West Bengal in the east.

The Oil Ministry said the two new projects were to be developed on a common carrier basis, making it mandatory for Reliance to offer 33 percent of each pipeline's total capacity to other firms.

"The interested party would have to enter into a take or pay contract or any other mutually agreeable contract with the owner for usage of the proposed pipeline," the ministry said.

India produces 95 mmscmd of gas and the government expects this to rise to more than 190 mmscmd by 2009 after a series of gas finds off the east coast, including by Reliance, come on stream.

Over 38% IPCL staff opt for VRS

IPCL’s voluntary retirement scheme has evoked tremendous response. By Thursday morning, over 2,500 employees had already applied for the scheme.

To attract more employees, the RIL management late last evening announced ex-gratia payment of Rs 1.5 lakh to all those who have applied for the scheme.

The phenomenal success of the scheme has made it the largest-ever VRS implemented by the company. In the past, the IPCL management had come out with a similar scheme in 2003 and in 2005.

In 2003, VRS was announced immediately after the RIL takeover and around 1,800 employees had opted for the scheme. In 2005, the scheme had received poor response and there were only 600 takers. Read more at Business Standard

RIL, Rohm to set up chemical unit

Sign an MoU for 200,000 tonne facility at Jamnagar.

Reliance Industries today announced that it will set up a chemical plant at Jamnagar in Gujarat in partnership with US-based Rohm and Haas Co, the world’s biggest producer of acrylic-paint ingredients.

The companies have signed a memorandum of understanding for a plant with a capacity to produce 200,000 tonnes of acrylic acid annually.

Products from the new plant would be used to make paints, packaging adhesives, detergents, and textile and construction materials, Reliance said in a statement to the exchanges.

Industry sources said the decision to collaborate with Rohm and Haas meant Reliance would not acquire the commodities business of Dow Chemicals. Read more at Business Standard

RIL, Rohm and Haas sign MoU for acrylic unit

Reliance Industries (RIL) and Rohm and Haas Company have signed a memorandum of understanding (MOU) to explore the joint construction of a world-scale acrylic-monomer complex in Jamnagar, India.

According to a release issued by Reliance to the BSE today, the proposed facility would have the capacity to make approximately 2,00,000 tonne of acrylic acid and its esters annually. "Materials from the facility are intended to serve as building blocks for environmentally-advanced products for paints and coatings, packaging adhesives, detergents, textile and construction materials. The new facility is expected to spur development of super absorbent polymers used primarily in the manufacture of baby diapers," the release added.

RIL has $12 bn for gas find, transport

$5.2bn will be spent on gas production, while a larger chunk of $7bn on building gas pipes.

Reliance Industries is lining up investments of over $12 billion for production of gas from its fields in the Krishna-Godavari basin and its transport to consumers across the country.

While $5.2 billion will be spent on bringing the gas to production, a larger chunk of $7 billion will be invested in building gas pipes to transport it to consuming locations.

Production of gas from the K-G basin will begin by June 2008, the company’s president (oil and gas), PMS Prasad, told reporters.

There are three key pipelines that are being planned by the Mukesh Ambani-controlled company from Kakinada in Andhra Pradesh — a 1,386-km pipeline to Bharuch in Gujarat at an investment of $4 billion, and two coastal pipelines to West Bengal and Chennai at an investment of $3-3.5 billion.

Read more at Business Standard

Reliance to invest $9 b in KG basin gas field

Reliance Industries Ltd will invest more than $9 billion in developing a gas field off the east coast of India and building pipelines to sell the fuel to consumers.

The company will spend $5.2 billion in bringing to production Dhirubhai-1 and Dhirubhai-3 fields in block KG-D6 in Krishna Godavari basin by June 2008. It will invest another $4 billion in laying a 1,386-km pipeline from this city in Andhra Pradesh to Bharuch in Gujarat to transport the fuel.

It will begin producing about 40 million standard cubic metres per day in June 2008 and raise it to peak output of 80 mmscmd in next five months, RIL CEO (Oil and Gas) P M S Prasad told reporters here.

Read more at The Hindu Business Line

Reliance in JV talks with Nova Chem

Reliance Industries, the country’s most valued firm, is understood to be in advanced stage of discussions with North American plastics and petrochemicals major Nova Chemicals as part of its bid to spread wings to foreign shores.

Reliance Industries (RIL) Group Chairman Mukesh Ambani, who leads India Inc on the world’s list of billionaires with a net worth of over $20 billion, is in the US with his top confidantes to discuss a potential joint venture with Nova Chemicals, sources close to the development said.

No official comments could be obtained from executives of RIL, which is also looking for a possible acquisition in the global retail space and is understood to be talking to Carrefour and the likes of Sainsbury and Marks and Spencer.

Read more at Business Standard

RIL signs $4.5 bn deal for gas fields

Reliance Industries Ltd has signed contracts worth $4.5 billion to develop its gas fields off India’s southeast coast. The spending will be part of $5.2 bn of investment the company plans for the area, RIL’s president for oil and gas PMS Prasad said here today. Gas production will start on schedule in 2008, he added. “Investment has already been committed to ensure that all suppliers meet their deadlines, which will enable us to start production,’’ Prasad said.

Commercially viable deposits in the fields may help Reliance meet India’s growing requirements for gas for power plants and fertiliser companies. India, Asia’s third-biggest oil market, is promoting exploration to reduce dependence on imports as prices rise to records and output declines from ageing fields. India’s current gas supplies of 85 million cubic meters a day, including imported liquefied natural gas, falls short of the potential demand of 170mn cubic meters, according to estimates by the Oil ministry. Gas consumption may rise to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7-8 % a year.

Read more at Financial Express

RIL,OVL to bid jointly for oil blocks in Iraq

In a bid to leverage their oil exploration and production expertise, Reliance Industries (RIL) and ONGC Videsh (OVL), the overseas investment arm of Oil and Natural Gas Corporation (ONGC), are planning to jointly bid for oil and gas blocks in Iraq.

The two companies are already renegotiating for a stake in the Tuba field and the Block-8 in western Iraq.

OVL, Reliance and Algeria’s Sonatrach were in talks with the Saddam Hussein regime before the US took over Iraq in 2000. The UN sanctions that came in after 2000 prevented further talks from talking place.

“We are ready to partner OVL in overseas search for oil and gas exploration blocks. OVL is in the process of getting approval for a joint business with us,” a senior Reliance official said. OVL official declined to comment. Read more at Business Standard

RIL to divest in oil and gas arm abroad

Chevron may be the partner.

Reliance Industries Ltd (RIL) will induct a strategic partner in its overseas oil and gas projects which are being spun off into a new entity.

Sources familiar with the development said RIL is to divest 20 to 25 per cent in the Dubai-based Reliance Exploration and Production DMCC, the holding company for RIL’s foreign oil and gas projects.

Global energy major Chevron Corporation, which has equity interest in RIL’s subsidiary Reliance Petroleum, might be the preferred partner for Reliance Exploration, they added. An RIL spokesperson declined to comment.

Reliance Exploration will house RIL’s interest in a discovered oil block in Yemen and an offshore exploration block in Oman and exploration projects in northern Iraq, East Timor and Columbia.

RIL is keen to acquire gas fields in central and West Asia.

Read more at Business Standard

RIL inches closer to mega JV with Dow

There’s yet another big global deal brewing and this might turn out to be a real blockbuster. It’s actually a global petrochem powerhouse in the making. Reliance Industries, which has been talking to the $49-billion Dow Chemicals-the world’s second-largest chemicals company-has inched closer to signing an MoU with the US company.

According to sources, talks are at an advanced stage and the two sides are expected to make a formal announcement by this weekend. RIL chairman Mukesh Ambani, along with a top-level team, including Nikhil Meswani, Kamal P Nanavaty, Alok Agarwal and Haresh Shah, is scheduled to meet Dow CEO Andrew N Liveris and the rest of the senior team for the final round of negotiations.

The Reliance official spokesperson, however, denied that a deal like this was in the offing. Even an email to Reliance failed to elicit any response. Dow Chemical’s media relations leader Andrew Wood expressed his inability to answer ET’s queries, stating that it is Dow’s policy not to comment on rumours about the company or its activities.

Read more at Economic Times

RIL opts out of Super Bazar race

Reliance Industries Ltd said on Thursday it was withdrawing its bid for ailing cooperative retail chain Super Bazar over the government's refusal to hand over management and control.

"We would like to withdraw our offer in view of the government's refusal to change the law," Soli Sorabjee, a senior counsel for Reliance, told the Supreme Court of India.

Reliance, which recently forayed into retail, had bid Rs 2.88 billion for the chain.

Reliance had said at the previous hearing it would not want to invest a huge amount of money unless it had effective management and control over Super Bazar, which would require a change in the existing law for cooperatives.

Read more at Financial Express

RIL sharpens teeth to bite into Carrefour chunk

RIL wants a bite of retail giant Carrefour. The company is in preliminary talks to pick up one or two of Carrefour subsidiaries. A deal could be likely by June, reports CNBC-TV18.It is the season for big-ticket acquisitions and Mukesh Ambani is keen to join the party. RIL is going retail shopping and wants a piece of the world's third-largest retailer Carrefour.

Currently, Carrefour operates across 29 different countries and has a chain of 12,000 stores and saw sales of 93 billion euros last year. So that should explain why RIL couldn’t go after Carrefour itself. What is however possible and likely is RIL picking up one or two of Carrefour’s many subsidiaries.

RIL could look at picking up the supply-chain and commodities trading subsidiaries. Talks are said to be in preliminary stages but a final agreement is likely before June. This move is expected to strengthen RIL's supply-chain management and also help improve its sourcing abilities.That is not all - RIL is also said to be eyeing, an international tier-II retail chain.

Names doing the rounds are UK's Sainsburys and Marks and Spencer’s foods. While the names get bigger, so does the war chest. Unconfirmed reports suggest that Mukesh Ambani is getting ready to go shopping with a whopping USD 50 billion. That is enough to buy Corus eight times over! While the Ambanis are known to think big, this may be more than even they can chew.