RIL plans foray into rig making

Reliance Industries, the petrochemicals giant, is planning to manufacture its own rigs to overcome a global shortage of deep water drilling rigs, which is affecting its exploration business.

“We are looking to enter the rig manufacturing business,” told RIL President Petroleum International Business Atul Chandra today.

The company had sought a three-year drilling holiday for exploring nine deep sea blocks, which it won through NELP auctions due to rig shortage in October 2007.

Reliance Industries (RIL) has committed to drill 73 wells in the three NELP-I blocks, five NELP-III blocks and one pre-NELP block, requiring more than 12 dig years to accomplish the programme.

Apart from this, it currently has two deep water rigs — C Kirk Rhine and Deep Water Frontier. It had contracted three more rigs — Expedition, D534 and Neptune — for mobilisation by June 2006, August 2006 and January 2007 respectively, with an additional rig, Blackford Dolphin, slated to join the fleet in October 2007.

Despite executing the required contracts, the mobilisation of rigs were always subject to availability.

While Expedition is not expected to be there before October 2008, Neptune and Blackford Dolphin will not come before May 2008.

The cost of hiring for drilling rig works out $450,000 a day and it makes more business for the company to manufacture these equipment on its own.

The company may rope in a partner for this business, said Chandra, adding that RIL plans to enter this business either by this financial end or by beginning of the next.

Revamped Vimal set for April splash

Vimal, the flagship textile brand of Reliance Industries relaunched with a new logo and new sub-brands, is expected to make available its entire range — shirts, trousers, suits and jackets — through 200 multi-brand stores in eight cities by April.

The company was at present firming up orders and plans to come out with a new communication in this regard, S Padmanabhan, chief operating officer, textile division (new projects), Reliance Industries, said while unveiling a revamped Vimal showroom in Chennai on Friday.

He said that multi-brand outlets were expected to fetch good business in the first year while the company would use its exclusive stores for brand building.

“We expect the multi-brand outlets to contribute about 85 per cent of business in the first year and more business in subsequent years,” Padmanabhan added. However, he declined to provide revenue figures.

Since the relaunch of the Vimal brand in October 2007, the company has unveiled three revamped exclusive Vimal showrooms in Ahmedabad, Mumbai and Bangalore.

It will open three more showrooms in this month. During the next financial year, it expects to launch 18 exclusive stores across the country.

Padmanabhan said that Vimal range would be available under three sub-brands with a view to cater to different customer segments.

Vimal Red brand of apparel (everyday wear) will be available in the price range of Rs 699-1,000, Vimal White (premium and trendy) will be available in the Rs 1,099-1,400 range. Vimal Black (premium offering) will be available at above Rs 2,500.

Vimal Red and Vimal White brands of apparel will be available in exclusive showrooms as well as through other multi-brand stores, while Vimal Black will be available only at exclusive Vimal showrooms.

The company expects new sub-brands – Vimal Red and Vimal white – targetted at the volume segment to drive more business for the company.

Reliance may plan petrochem project in Qatar

Reliance Industries is keen to set up a petrochem complex in Qatar.
"The company is definitely interested in establishing a world-scale petrochemical complex here with Qatar Petroleum," said R P Sharma, president (LNG business), Reliance Industries.

Making a presentation at the Middle East Gas Summit on emerging trends in India and China, Sharma said domestic gas production in the two countries was expected to increase rapidly over the next 15 years.

Consumption was expected to grow even faster - making gas imports necessary for both India and China. India plans to import some 22.5 million tonne to meet its demand in 2011 and 2012.

The development of gas transmission and distribution networks in China and India is opening greater export opportunities for Russian and Middle Eastern gas, he said.

"Over a period of time, China and India may move from the role of a price-taker to price-maker in the Asia-Pacific region," Sharma said.

Reliance makes another gas discovery

Reliance Industries (RIL), the country’s largest company by market capitalisation, has discovered gas in a new well in its NEC-25 block in the Mahanadi basin off the coast of Orissa.

This is the company's eight discovery in the block, which it had won in the first round of the New Exploration and Licensing Policy (NELP-I) in 1999. The block is reported to have recoverable reserves of around 1.1 trillion cubic feet (tcf) of gas, which the Mukesh Ambani-promoted company hopes to develop at an investment of around $1.13 billion.

The rate of production of gas from the block is expected to be 35-40 million cubic metres per day (mcmd).

The latest discovery in the Mahanadi shallow-water block, named Dhirubhai-40, has been notified to Directorate General of Hydrocarbons (DGH). "RIL is currently evaluating the potential commercial interest of the discovery through additional data collection and analysis," the company said in a statement. Canada-based Niko Resources holds 10% stake in the block.

The NEC-25 block lies to the north of RIL’s D6 block in the Krishna-Godavari block from which the company plans to begin production later this year. At a peak rate, the gas would be produced at 80 mcmd, which is almost equal to the total gas availability in the country. The company is developing the field at an investment of $5.2 billion.

RIL owns 90% stake and Niko 10% in the D6 block, which holds gas reserves of nearly 11.2 tcf. The D-6 block would be RIL’s first producing block in India.

The company had earlier also discovered both oil and gas in an offshore block in the Cauvery basin off Tamil Nadu’s coast.

Reliance currently has stakes in 34 oil and gas blocks in the country, and has made about 34 discoveries (both commercial and non-commercial) in India with a success ratio of almost 60%.

Reliance strikes gas in Krishna basin

Reliance Industries, the country’s largest company by market capitalisation, has discovered natural gas in a deepwater block in the Krishna basin, about 50 km off the coast of Andhra Pradesh.

"The gas discovery has been made in the very first exploratory well in this block," the company said in a statement.

Reliance holds 90% interest in the block which it won under the fifth round of the New Exploration Licensing Policy (NELP V). Hardy Exploration and Production India has 10% stake in the block.

The company said it was testing the commercial viability of the discovery, and the size of the reserves would be known after further tests on the block is completed.

The discovery has been notified to the government and the Directorate General of Hydrocarbons.

The block, called Dhirubhai 39, is close to the Dhirubhai 6 block in the Krishna Godavari basin off the coast of Kakinada in Andhra Pradesh. The Dhirubhai 6 block has gas reserves of around 11 trillion cubic feet, and is set to start production later this year. Production would reach a peak rate of 80 million cubic metres per day (mcmd), which is almost similar to the volume of gas currently available in the country.

The Dhirubhai 6 block would be Reliance's first producing block in India.
The company had earlier discovered both oil and gas in an offshore block in the Cauvery basin off Tamil Nadu coast.

Reliance currently has stake in 34 oil and gas blocks in the country, and has made about 34 discoveries (both commercial and non-commercial) in India with a success ratio of almost 60%.

RIL Retail gets 1 loyal client on every sq ft

Mukesh Ambani-led Reliance (RIL) group's retail juggernaut seems to be gaining scale uninterrupted, despite hiccups like political protests, going by the success of its the customer loyalty programme.

Reliance Retail, within the four months of rolling out its first store in November 2007, has touched an outlet base of 500 stores in various formats, spanning three million square foot (sq ft) of occupied space in various cities.

This expansion of the retail space has been achieved alongside the company's customer loyalty programme - Reliance One - which has also touched a membership base of three million customers.

The average of one loyal customer per every square foot of retail space is probably the highest and fastest loyalty programme amongst all the retail companies in India, according to industry people who did not wish to be identified.

Reliance Retail, a 100% subsidiary of the country's most valued firm Reliance Industries, is targeting to make its loyalty programme one of the top 10 loyalty card base in the worldwide retail sector by 2012.

Reliance One, a pre-paid facility which allows customers to start using it right from the point of purchase, is valid across all the nine different formats of Reliance Retail stores.

Building on the success of Reliance One, the company is also seeking to become "the distributor of choice" for all financial services companies with an all-India footprint at every product level, said an industry source.

Healthy margins raise RIL net 26%

Healthy refining margins saw India's largest private sector company Reliance Industries (RIL) posting a 26 per cent increase in its net profit for the quarter ended December 2007 over the corresponding previous quarter.

The company earned $15.4 a barrel from processing oil during the quarter compared with $11.7 in the corresponding previous quarter.

However, net profit grew 162 per cent to Rs 8,079 crore over the corresponding previous quarter on the back of a one-time gain of Rs 4,733 crore from the sale of a stake in its subsidiary Reliance Petroleum Ltd (RPL).

The company gets the bulk of its revenue from crude oil refining and petrochemicals, but also has a presence in retail and textiles.

"I am happy to report that Reliance continues to surpass previous records in financial performance,” said Mukesh D Ambani, chairman, Reliance Industries.

“The new growth platforms around oil and gas, organised retailing and agro-retail initiatives are gathering momentum and the initial response has been very encouraging. Each of these initiatives inherently addresses India's economic and social imperatives," he added.

The company's stock closed 3.3 per cent lower on the Bombay Stock Exchange on Thursday at Rs 2,996.25 against Wednesday's close of Rs 3,098.35.

Explaining the performance, a Mumbai-based analyst said, "The company saves money on crude cost (since its refinery can handle lower grades of oil which are much cheaper) and makes money in refining."

“Besides, being a private organisation, it does not have to bear any under-recoveries, which reflects well on its margins,” the analyst added.

The company also announced that RPL’s upcoming refinery at Jamnagar is expected to be completed ahead of its initial schedule of December 2008.

Reliance Petroleum's refinery, coming up next to RIL's 660,000 barrels per day refinery, will have a capacity to process 580,000 barrels per day.

During the nine-month period, the RIL refinery processed 23.7 million tonnes and achieved an operating rate of 96 per cent. Petrochemicals production grew 4 per cent to 14.5 million tonnes, against 14.0 million tonnes for the corresponding previous quarter.

In this period, RIL also acquired a majority stake in the operations of Gulf Africa Petroleum Corporation (GAPCO) and has started shipping products to the east African market.