If the EC decides to put on hold a gas price revision for RIL, it would set a precedent for pricing decisions of the government and policy decisions taken but undergoing procedural delays.
Billionaire Mukesh Ambani's Reliance Industries Ltd (RIL) has seen pre-tax profit recover to pre-pandemic levels on the back of continued growth in consumer businesses, Moody's Investors Service said on Monday. The oil-to-retail-to-telecom behemoth on Friday reported a 0.7 per cent Ebitda (earnings before interest, tax and depreciation and amortisation) growth for the quarter ended December 31, 2020, compared with the corresponding quarter in the previous year. "A strong performance in digital services and retail segments underpinned the improvement in consolidated earnings, a credit positive," Moody's said commenting on the earnings. Continued growth in earnings combined with the company's strong balance sheet with zero net debt on a reported basis will keep Reliance's credit metrics strong for its Baa2 rating over the next 12-18 months, it said.
After missing two self-imposed deadlines, billionaire Mukesh Ambani's Reliance Industries Ltd on Friday announced recalibration of a proposed $15 billion deal to sell 20 per cent stake in its oil refinery and petrochemical business to Saudi Aramco, saying the two firms have agreed to re-evaluate the proposed investment in light of the Indian firm's new energy forays. The stake sale talks, which were first officially revealed in August 2019, are being reset in light of Reliance making forays into new energy business in recent months by investing $10 billion in alternative energy over three years. To pivot to green energy, it has already bought a German maker of photovoltaic solar wafers and signed a deal with a Danish company to manufacture hydrogen electrolysers in India.
The ministry had previously wanted to disallow $1.235 billion expenditure that RIL had incurred on putting production facilities at the Bay of Bengal gas fields but in the 7-page notice it sent to the company on May 2, the cost to be disallowed was put at $1.462 billion, sources privy to the development said.
The companies are in talks with Shell, Petronet LNG to book capacity
A fall in crude oil price and Aramco's $75 billion annual dividend commitment may have delayed Saudi company picking a stake in Reliance Industries Ltd's oil-to-chemical unit (O2C), research firm Jefferies said. Richest Indian Mukesh Ambani had in August 2019 announced talks for the sale of a 20 per cent stake in the O2C business, which comprises its twin oil refineries at Jamnagar in Gujarat and petrochemical assets, to the world's largest oil exporter. The deal was to conclude by March 2020 but has been delayed for reasons not disclosed by either company.
RIL, which has 26 oil and gas blocks, including the giant KG-D6 fields, has been applying to the Home Ministry for security clearance of the specialised expatriate technical personnel deployed on its offshore vessels, including seismic survey ships, drill ships, tug boats and supply vessels.
Due to poor hydrocarbon prospects, BP surrendered nine out of the 21 oil and gas blocks where it had bought 30 per cent stake from Reliance Industries for $7.2 billion
Steel manufacturers on Wednesday hit out at 'unilateral' decision of the Oil Ministry to curb natural gas supplies from Reliance Industries' KG-D6 fields to non-core users, saying only a ministerial panel was empowered to take such decision.
Reliance from 0600 hours today began complying with an oil ministry order asking it to first supply gas produced from eastern offshore KG-D6 fields to priority users -- urea making fertiliser plants, electricity generation houses, LPG extraction units and city gas distribution firms.
After a long wait for government approval, Reliance Industries (RIL) is to begin work on development of four satellite fields -- D-2, D-6, D-19 and D-22 -- in India's largest gas field, block D6 in the Krishna-Godavari basin, or KG-D6.
RIL will get $ 7.2 billion for the stake sale in 21 blocks and could get further $1.2 billion as performance payments based on exploration success resulting into development of commercial deliveries.
The way the government treated miner Vedanta Resources' proposal to buy majority of UK's Cairn Energy in Cairn India and RIL selling 30 per cent of its stake in 23 properties, including the prolific KG-D6 gas block to BP, goes to the heart of the mistrust between India Inc and United Progressive Alliance-2 in 2011.
Petroleum secretary G C Chaturvedi said the arbitration notice grants a time of up to a month to respond and there was no hurry.
CAG had said the increase in field cost would mean a lower profit take for the government.
The government will initiate action to limit the amount of expenditure Reliance Industries is allowed to recoup from its flagging KG-D6 gas fields in three to four weeks, Oil Secretary G C Chaturvedi said on Tuesday.
The Dhirubhai-34 discovery, known as the R-Series field, has gross in-place gas reserves of 1.64 trillion cubic feet, which, according to Reliance, can be brought into production in 4-5 years, sources privy to the development said.
The Oil Ministry is seeking Cabinet nod to allow Reliance Industries to retain three gas discoveries worth $1.45 billion in the eastern offshore KG-D6 block even after expiry of timelines.
The report, submitted to the government last week, says the slow pace of field development is the reason production has fallen to 50 million standard cubic metres a day (mscmd) from a peak of 60 mscmd last year.
Reliance Industries Ltd (RIL), the operator of the KG-D6 gas block, has told the government it cannot comply with its latest directive on prioritising gas supply.
Reliance Industries Ltd (RIL) on Wednesday asserted in the Supreme Court that it did not receive any favour from the government in the contract for exploration of oil and gas from Krishna-Godavari basin.
Cabinet Committee on Economic Affairs had on July 22 cleared the sale of stake by RIL to BP in 21 blocks.
Although the Oil Ministry has the authority to decide on Reliance selling 30 per cent interest to BP in 23 exploration blocks, including the prize eastern offshore KG-D6 gas fields, the ministry on Tuesday decided to refer the deal to the CCEA, sources privy to the development said.
Petroleo Brasileiro SA or Petrobras, Brazil's state-controlled oil firm, has offered ONGC its 15 per cent interest in the Krishna Godavari basin block that sits next to Reliance Industries prolific KG-D6 fields without any cost.
Cairn India, which had made four discoveries in the KG-DWN-98/2 block before selling 90 per cent out of its 100 per cent stake in the block to ONGC in 2005, has written to the oil regulator DGH saying the state-owned firm is grossly overstating the reserves in block, sources said.
The company is in talks with BG India and Italian E&P major, ENI.
Clearing the last hurdle, the Union home ministry has given unconditional approval for United Kingdom's BP to buy a 30 per cent stake in Reliance Industries' oil and gas blocks, including the showcase KG-D6 gas fields, for $7.2 billion.
Reliance has seen natural gas output fall to 50-52 mmscmd during recent times from over 60 mmscmd achieved in mid-2010 due to reservoir complexities.
Reliance Industries may ask the government for a refund of its investment if it is forced to give up any part of the prolific KG-D6 block as it has spent a huge sum of money on exploration after obtaining necessary permission to retain the entire 7,645-sq km area.
The supplies to Anil Ambani Group's power plants including the one proposed at Dadri near Delhi, will be subject to government approving the allocation of the fuel, Mukesh Ambani said.
The output was behind target in 2015-16 as well and the government is yet to issue a cost disallowance notice for that
Around 15 years ago, when Reliance Industries (RIL) struck natural gas in the Krishna-Godavari (KG) basin off the east coast, the government made plans to supply that fuel cheaply to scores of generators that sprang up in India triggered by the discovery. Most of the plants, which account for 6 per cent of India's total generation capacity, operate sparsely after the KG-D6 area first failed to meet production targets, and then finally shut shop. Affordable domestic gas was why those thermal plants came up and the rate of the fuel today is why those generators hardly operate. Record liquefied natural gas (LNG) rates may yet again unravel India's ambitions to expand use of gas in industries, households and vehicles. Rates, while volatile, may stay strong this decade as developed nations with higher purchasing power embrace gas as the transition fuel.
The government nod to Reliance Industries selling 30 per cent stake in its oil and gas blocks such as eastern offshore KG-D6 to London-based BP Plc for $7.2 billion hinges on no-objection certificate (NOC) from Canada's Niko Resources and UK's Hardy Oil and Gas.
In one of the country's biggest energy deals, Reliance Industries on Monday announced sale of 30 per cent stake in its 23 blocks including the giant KG-D6 gas fields to the United Kingdom's BP Plc for $7.2 billion.
Oil regulator PNGRB on Monday approved the tariff that Mukesh Ambani-owned East-West pipeline will charge for transporting gas from Reliance Industries' eastern offshore KG-D6 fields to users.
Reliance Industries is ostensibly seeking a 25 per cent increase in the price of natural gas it produces from the eastern offshore Krishna-Godavari Basin after it wrote to the Oil Ministry saying it has customers willing to pay more than the government-approved price.
Billionaire Mukesh Ambani-run Reliance Industries Limited 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.
Reliance Industries 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.
After successfully dabbling in organised retail in 2006, Mukesh Ambani, chairman of India's largest private sector company, Reliance Industries (RIL), has now set his eyes on no-frills, low-cost housing."RIL has deep pockets and excellent execution skills. It has executed two large projects like the Jamnagar refinery and the KG-D6 basin in a record time. Another such large project is only obvious for the company to get into," said a source close to the development.
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