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$6 bn JV with BP highlight of RIL's oil, gas year: Ambani

Mumbai, July 21 (IANS) The recent Reliance Industries (RIL) and British energy major BP deal on joint investment of $6 billion across the entire energy value chain in India and starting commercial gas production from coal bed methane (CBM) blocks in Madhya Pradesh were the highlights of RIL’s oil and gas business in the past year, Chairman Mukesh Ambani said on Friday.

“RIL and BP have recently approved an investment plan to monetize over 3 trillion cubic feet of gas from new fields in the KG (Krishna Godavari basin) D6 block,” Ambani said while addressing the company’s 40th annual general meeting here.

Last month, RIL and BP annnouced the creation of a joint venture energy vertical to work across the entire value chain, involving investment of $6 billion, or Rs 40,000 crore. This would also develop their existing deep water gas fields in India’s eastern offshore to bring to fresh production 1 billion cubic feet per day of natural gas by 2022.

“We have commenced commercial gas production from the CBM Blocks in Madhya Pradesh. CBM development, spread over 1000 square kilometers with hundreds of wells, makes it among the largest surface footprint projects in India,” Ambani said.

“First gas from these fields is expected in mid-2020,” he added.

During the year, RIL also commissioned its paraxylene complex “making Jamnagar the largest manufacturing facility of paraxylene in the world.”

Besides, the company is in an advanced stage of commissioning its petcoke gasification project at Jamnagar.

Touted as largest petcoke gasification project in the world, it will convert low-value petroleum coke to high-value fuels and hydrogen so as to ensure energy self-sufficiency.

“The benefits of the project will be immediately visible in lower energy cost and higher gross refining margins,” Ambani said.

On Thursday, RIL posted a healthy 9 per cent rise in its standalone net profit for the first quarter ended June at Rs 8,196 crore on the back of higher margins from its petrochemicals business and a one-time gain from the sale of stake in Gulf Africa Petro.

The company had registered a standalone net profit of Rs 7,548 crore during the April-June quarter a year ago. The standalone figures reflect the performance of the company’s refining, petrochemicals and hydrocarbons exploration businesses.

The gross refining margin (GRM), derived from conversion of a barrel of crude oil to refined products, was $11.9 in quarter under consideration, compared to $11.5 in the same period a year ago.

Commenting on the results, Ambani said: “Industry leading portfolio of assets in the refining and petrochemicals business contributed to considerable improvement in earnings for the quarter.”

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