Reliance IndustriesBSE 1.64 % (RIL) is looking beyond oil and gas for opportunities in energy innovations, such as renewables and new-age mobility, while consolidating its position in the traditional exploration business by infusing $6 billion (Rs 40,000 crore) into the KG-D6 field in the east coast with its partner BP plc.
This is a major step in RIL's transformation from a brickand-mortar company to a conglomerate that will straddle the traditional and new-age energy space, consumer retail as well as digital and media world. And just like in exploration, RIL will go with BP in all of this. The two companies announced a strategic partnership for this journey, resuscitating and expanding the scope of a deal stitched in 2011for businesses in the oil industry.
"Under this new cooperation our two companies will jo intly explore options to develop differentiated fuels, mobility and advanced low-carbon energy businesses in India. We expect to collaborate, in addition to the conventional fuels and aviation marketing, on unconventional mobility solutions, addressing electrification, digitisation and disruptive mobility trends," RIL chairman Mukesh Ambani told reporters after announcing the partnership.
BP chief executive Bob Dudley said the investment for developing discoveries in water depths of over 2,000 metres in the KG-D6 block will supply 10 per cent of India's projected gas demand by 2022. "Together with Reliance, I want to reinforce our commitment to working with the government to sup port the Prime Minister's (Narendra Modi's) call for import substitution and the development of a gas-based economy," Dudley said.
The announcement of the investment, in spite of ongoing arbitration proceedings against several government orders, marks a revival of investor sentiment, which had been clouded by political controversies over RIL-BP combine's dispute with government over issues pertaining to the KG-D6 field, particularly shortfall in gas production.
The fact that Ambani and Dudley flew down to Delhi to make the announcement indicates a vote of confidence in the policy and market reforms implemented in the three years of the Modi government. Oil minister Dharmendra Pradhan tweeted, "Welcome BP & RIL announcement to invest Rs 40,000 crore to produce gas; invest in downstream and develop lowcarbon energy business."
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