Reliance Industries Investing $24 Billion in Egyptian and Indian Projects

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Researched by Industrial Info Resources (Sugar Land, Texas) -- In the first half of August, India’s Reliance Industries Limited (BOMBAY: RIL) made project investment announcements in India and Egypt, which could be worth a total of about $24 billion. The moves are interlinked in the company’s strategy of securing energy resource supplies and building bridgeheads into major global markets.

Following a meeting between RIL and Egyptian officials in Alexandria, Egypt’s Prime Minister Ahmed Nazif announced that RIL would invest $10 billion in projects and a spokesman said that of the total $1 billion would be invested in a new oil refinery and at least $7 billion in petrochemical projects.

RIL has been importing Egyptian crude oil through a subsidiary, Reliance Petroleum, since 2001. Egypt’ growing importance as a source of natural gas and its strategic position straddling routes to Europe and Africa are said to have influenced RIL’s strategic investment decision. The company currently has hydrocarbon assets in Oman, Yemen and East Timor with oil assets in Yemen and gas in East Timor and Oman. Egyptian government sources estimate that Indian companies have $320 million investments in the country.

In India RIL will invest up to $14 billion in a range of projects which cover exploration, production and the laying of a 1,400 kilometer east-west pipeline in the next two or three years. The pipeline alone is estimated to cost about $3 billion.

RIL will invest $5.7 billion in a number of oil and gas development projects over the next one to two years and is planning to create a national Indian gas grid. The company also plans to carry out extensive seismic activities in all major basins and will drill over 100 wells in the next four years. Some of the $14 billion will be put into overseas projects.

The Reliance Group is India’s largest private sector enterprise with businesses in the energy and materials value chain. It has annual revenues of over $25 billion and its flagship company RIL is a Fortune Global 500 company and the largest private sector company in India.

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