RIL’s Corporate Highlight of First Quarter 2009-10

• The Scheme of Amalgamation of Reliance Petroleum Limited (RPL) with Reliance Industries Limited (RIL) has been sanctioned by the Hon’ble High Court of Judicature at Bombay and the Hon’ble High Court of Gujarat at Ahmedabad. The Scheme has become effective from 11th September 2009 with the appointed date being 1st April 2008.

• The Board of Directors of Reliance Industries Limited proposed, subject to shareholders
Approval, proposes issue of bonus shares in the ratio of one equity share for every one equity share held in the Company.

• The Board also declared dividend of Rs. 13 per share for the financial year 2008-09. This has resulted in a payment of Rs. 2,219 crore inclusive of taxes of Rs. 322 crore.

• Both the bonus shares and dividend will accrue to the shareholders of erstwhile Reliance Petroleum Limited which has been amalgamated recently with the Company.

• The Petroleum Trust sold 1,50,00,000 equity shares of the Company. The Trust realized about Rs. 3,188 crore, at an average price of about Rs. 2,125 per share. Reliance Industrial Investments and Holdings Limited, a wholly owned subsidiary of RIL, is beneficiary of the Trust. The cash proceeds, net of transaction expenses, have resulted in reduction of Investment insubsidiaries. Profit on sale of these shares, net of transaction expenses, of Rs. 2,941 crore (US$ 611 million) will be reflected in the consolidated accounts of RIL.

• On 2nd April 2009, gas production commenced from KG D6. The project was completed in a
record time of six and half years, as against world average of 9 – 10 years for similar deepwater
facilities globally.

• RIL surrendered the EOU status for its refinery with effect from 16th April 2009 to cater to
increasing demand of petroleum products in the Country.

• A T Kearney lists RIL as one of the Top 25 Global Champion for 2009 which managed to
outperform the competition in the midst of global financial meltdown.

• Boston Consulting Group (BCG) ranks RIL as the 5th most sustainable value creators.

RIL’s First Quarter Result 2009-10

Record PBDIT oF RS. 7,845 crore for the quarters

Record PBT oF RS. 4,951 crore for the quarter

KG D6 gas production ramp up to 40 mmscmd in record time of 6 months

All the processing units of the SEZ REFINERY COMMISSIONED

Reliance Industries Limited (RIL) today reported its financial performance for the half year

ended 30th September, 2009.

Highlights of the un-audited financial results as compared to the corresponding period of the previous year are:

Highlights of Year to date Performance

• Turnover decreased by 8.7% to Rs. 81,284 crore (US$ 16.9 billion)
• Exports decreased by 26% to Rs. 43,035 crore (US$ 8.9 billion)
• PBDIT increased by 15% and achieved a record level of Rs. 14,939 crore (US$ 3.1 billion)
• PBDIT Margin increased from 14.6% to 18.4%
• Profit Before Tax decreased marginally by 1.2% to Rs. 9,706 crore (US$ 2.0 billion)
• Cash Profit increased by 7.3% to Rs. 12,425 crore (US$ 2.6 billion)
• Net Profit decreased by 8.5% to Rs. 7,518 crore (US$ 1.6 billion)
• Gross Refining Margin at US$ 6.3 / bbl for half year and US$ 6.0 / bbl for the quarter ended 30th September 2009

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Dispute can't be arbitrated, says RIL

Reliance Industries Ltd (RIL) today told the Supreme Court that the gas dispute between the company and Reliance Natural Resources Ltd (RNRL) cannot be put to arbitration, and resolution to the dispute lies in the relevant section of the Companies Act.

Parekh and Co, advocates for RIL, gave a written statement on this to the apex court.
The scheme of demerger (of the original Reliance empire) did not make any mention of arbitration and it only contemplated that RIL will demerge its subsidiary company (RNRL) and hand over assets, the statement said, adding that issues obstructing a suitable arrangement in gas supply are beyond the purview of the demerger scheme.

“What RNRL is seeking is way beyond the scheme — it seeks an order for specific performance of the MoU (at the time of demerger),” said RIL. It also said the demerger scheme involves ‘issues of public interest and public policy’ and therefore it cannot be put to a dispute resolution mechanism.

The submission comes after the Bench at the apex court, during the course of case hearing, enquired about the possibility of arbitration between the two companies. “There are some parameters to arrive at suitable arrangements for supply of gas,” Justice R V Raveendran said on Tuesday. “If you are not able to reach a suitable arrangement... we can direct you to arrive at a suitable arrangement or direct you to go for arbitration.”

RIL and RNRL have moved the apex court on the Bombay High Court order of June 15, which had asked RIL to provide 28 million standard cubic metres per day of gas to RNRL at a price of $2.34 mBtu. RIL, however, contends that it cannot do so in view of government policy. It has also said it cannot sell at a price lower than the government approved price of $4.2.

Source : http://www.business-standard.com
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Govt benefits from gas row: RIL

Mukesh Ambani owned RIL, accused of being hand-in-glove with the ministry of petroleum of natural gas by Anil Ambani's RNRL, for the RIL for the first time on Tuesday admitted before the Supreme Court that the dispute over gas supply and pricing between the companies was benefiting the Centre.

the Mukesh Ambani group wanted to thrash out differences over the terms and conditions of the gas supply master agreement (GSMA) drafted pursuant to the family agreement, but RNRL went to the government saying RIL management was not to be trusted as they were crooks and pleaded for formulation of a gas utilisation policy (GUP).

When a Bench comprising Chief Justice K G Balakrishnan and Justices R V Raveendran and P Sathasivam asked whether any party, RIL or RNRL, had challenged the GUP, Salve said none had ever questioned it in a court. "The net result is that the government is a gainer in this fight. RIL had marketing freedom of gas. It lost it once the GUP came about. And RNRL thinks the GSMA did not meet the intention of the family agreement, though we say that it has been substantially complied with," Salve said.

Source: Economic Times
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Selling gas at $2.34 will hit us: RIL

Reliance Industries on Tuesday told the Supreme Court that it would lose money by selling natural gas at $2.34 per million British thermal units or mmBtu.

The company’s lawyer Harish Salve told the court that RIL had not told the Bombay HC that sale at $2.34 per unit would be profitable and that the HC appeared to have misunderstood the matter.

The hearing before India’s apex court was also marked by interjections by the justices. The judges observed that the natural gas belongs to the government and all contracts on sharing of gas are subject to the government’s approval. The court also said that it may issue a direction to the two feuding companies, RIL and RNRL, to arrive at a suitable arrangement. "Gas belongs to the government. Gas is national property," said a three judge bench headed by Chief Justice KG Balakrishnan. CJI, Justice Balakrishnan speaking for the bench observed, 'all contracts are subject to it (government’s ownership concept over gas)."

In the initial stages of court proceedings on Tuesday Salve explained the difficulty on arriving at an agreement with RNRL on supply of gas zeroing in on various aspects of the MoU, demerger and government’s gas utilization policy.

Salve said a contract between both the parties cannot be arrived at by using the agreement with NTPC as a template. The court then said, "There must be some parameters to arrive at a suitable agreement."

Justice Raveendran speaking for the bench remarked, "What power is available to the court, if there is no suitable agreement. We will do two things. We will direct you to arrive at a suitable agreement or refer the issue to an arbitrator to pass an award."

Salve, however said, any agreement between RIL and RNRL could be on the basis of the government’s gas utilization policy. The MoU could not be a basis for arriving of a suitable agreement, Salve said. RIL’s counsel will continue his arguments on Wednesday.

Source: http://economictimes.indiatimes.com
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Gas is national asset: SC

Reliance Industries on Tuesday told the Supreme Court that it would lose money by selling natural gas at $2.34 per million British Thermal units or mmbtu.

The judges observed the natural gas belongs to the government and all contracts on sharing of gas is subject to the government’s approval. The court also said that it may issue a direction to the two feuding companies, RIL and RNRL, to arrive at a suitable arrangement.

“Gas belongs to the government. Gas is national property”, said a three-judge bench headed by chief justice KG Balakrishnan. The CJI, speaking for the bench, observed: “All contracts are subject to it (government’s ownership concept over gas).”

Source: Economic Times
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Statement from Reliance Industries Ltd. (RIL)

Drilling of the first exploratory well KGD9-A1 in the deepwater block KG-DWN-2001/1 (KG D9) has been concluded.

The well encountered sands in both the upper and lower Miocence target levels with some background gas. The data obtained from this first exploration parametric well is significant and will be integrated with the existing geological model to improve the understanding of the geology and petroleum system within the block before drilling subsequent wells. There is a commitment to drill 3 more wells in this block.

RIL remains committed to pursuing the exploration campaign within this block and will incorporate data and information from this well to upgrade the prospect inventory for drilling of three more wells. Any rumour of RIL surrendering this block is completely baseless and unsubstantiated.

Reliance Industries Limited is the operator and holds a 90 per cent participating interest in the block. Hardy, through its wholly owned subsidiary Hardy Exploration & Production (India) Inc., holds a 10 per cent participating interest.

Reliance Industries Limited

Reliance Industries Limited (RIL) is India’s largest private sector company on all major financial parameters with a turnover of Rs. 1,46,328 crore (US$ 28.85 billion), cash profit of Rs 22,365 crore (US$ 5.08 billion), net profit (excluding exceptional income) of Rs. 15,637 crore (US$ 3.02 billion) and net worth of Rs 126,373 crore (US$ 24.92 billion) as of March 31, 2009.

RIL is the first private sector company from India to feature in the Fortune Global 500 list of 'World's Largest Corporations' and ranks 117th amongst the world's Top 200 companies in terms of profits. RIL ranks 75th in the Financial Times FT Global 500 list of the world's largest companies. RIL is rated as the 15th ‘Most Innovative Company' in the World in a survey conducted by the US financial publication Business Week in collaboration with the Boston Consulting Group.

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RIL pays $9 for buying spot LNG

Reliance Industries on Wednesday said it is paying over $9 for buying liquefied natural gas from spot market as the government has not allowed use of fuel pumped by it for captive use, a company official said.

‘‘We are forced to pay more than what our gas would have cost us,’’ RIL president (oil and gas business) PMS Prasad told reporters here.

RIL buys about 10 million standard cubic meters per day of regassified-LNG from Petronet LNG Ltd and Royal Dutch/Shell—the nation’s only two LNG importers, for use in its refineries and petrochemical plants.

‘‘We need about 15 mmscmd (of gas). We get some gas from Panna/Mukta and Tapti fields (in western offshore) and the rest has to be met from spot LNG purchase,’’ he said.
Against the delivered price of RIL’s eastern offshore K-G D6 field gas of $6.5 per mmBtu at its plants in Gujarat, the spot-LNG is costing it $8.5-9 per mmBtu, he said.

The government has so far named customers in fertiliser, power, city gas, LPG and steel sector for the first 40 mmscmd of K-G D6 output and is yet to notify new users despite the production capacity crossing 65 mmscmd.

The company cannot sell gas to any of the users, including its own refineries, which are starved of fuel, unless allocation is approved by the government.

The government yesterday formed a ministerial panel led by finance minister Pranab Mukherjee to allocate natural gas from the company's field to new users.
source: Financial Express
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RIL eyes oil refiners in US, Europe

The company feels valuations are low and the demand would later rise.

Mukesh Ambani after completing the world’s largest oil refining complex at Jamnagar in Gujarat, has now set his eyes on owning refining assets in the US and Europe.

His Reliance Industries (RIL) has initiated preliminary discussions with US-based refiners such as Valero Energy Corp, Sunoco Inc and Flying J Inc for acquiring refineries, said sources in the know. Royal Dutch Shell’s three refineries in Europe are also on the Indian refiner’s radar, they added.

Two senior officials said RIL was gearing to acquire assets worth $3-4 billion (in the range of Rs 14,000-18,500 crore). Funds for acquisition will not be an issue, as it is sitting on a cash reserve of $5 billion (Rs 25,000 crore).

“As value depreciation is still very much an issue with refining assets in the US and Europe, RIL feels the timing is perfect for an acquisition. We are keen to have a global presence in refining, especially with some assets in the developed economies,” said an executive who did not wish to be named.

Last week, RIL senior Vice-President Maurice Bannayan said, “We are in advanced talks with looking at refinery and petrochemical units for acquisition in the US and Europe, mostly in the US.”

When asked, Valero spokesperson Bill Day said, “Valero has had its refinery in Aruba (in the Caribbean) available for sale since 2007, and we said we would aggressively seek strategic alternatives – which could include a sale – for our refineries in New Jersey and Delaware. Valero does not identify the parties that have expressed an interest in any of our properties.”

Virginia Parker, director of Marketing at Flying J, said: “We have no comment at this time. All matters surrounding sale of assets are subject to strict confidentiality requirements.” Sunoco officials declined to comment.

A RIL spokesperson said, “As a corporate policy, we do not comment on speculation.”


Many European petroleum giants have put their refineries on the block after a slump in demand for fuels and petrochemical products. These refineries are either running at lower profit margins or have shut, said a Mumbai-based analyst. However, RIL feels there are signs of recovery in these markets and once the financial situation improves, the demand would trek high.

After the crash of financial markets, Valero had cut costs at plants at Paulsboro in New Jersey and Delaware City and pursued “strategic alternatives” for them and the shuttered 235,000 barrels per day (bpd) Aruba refinery, Chief Executive Officer Bill Klesse said in a recent memo to employees. Previously, Valero, which operates 18 refineries throughout the US, Canada and the Caribbean, used the term strategic alternatives when it put a refinery up for sale.

The Paulsboro refinery is in the same New Jersey county as the refinery Sunoco is shutting. Sunoco recently announced plans to indefinitely shut its 145,000 bpd Eagle Point refinery at Westville in New Jersey, furlough 400 workers and halve its dividend, as the continuing recession hurts the US refiner’s profits.

Weak demand for refined products during the financial downturn, coupled with increased capacity, has pressured margins through the industry, and it is the right time for RIL to buy refineries at low cost, analysts said.

Big West Oil LLC, which has two refineries in the US, has halted taking deliveries after parent Flying J filed for bankruptcy. Big West’s Bakersfield refinery has a processing capacity of 68,000 bpd, according to data compiled by Bloomberg. Big West also has a 30,000 bpd plant in Salt Lake City.

Swiss-based refiner Petroplus said earlier this year it would sell its Teesside refinery in the UK by the end of June or turn it into a storage site if no buyer can be found. The 1,17,000 bpd plant stopped production in March 2009, when the company stopped buying crude for it.

Shell has been looking to sell its Harburg and Heide refineries in Germany for the past six months. In August, sources said India’s Essar Oil had given a bid for both refineries, as well as for Stanlow, Shell’s another refinery in the UK. Harburg has a capacity to process 110,000 bpd, while Heide can process 93,000 bpd. Stanlow has a capacity to process 267,000 bpd.

Other refineries up for sale in Europe include Italian firm Eni’s Livorno refinery and Swiss-based Petroplus’ Teesside refinery.

RIL is also eyeing the fuel retailing markets of the US and Europe, more than a year after it closed retail operations in India. Selling petrol directly in the US market could save the company a 5 to 10 per cent additional cost as traders’ commission, and the company has approached the US authorities for approval to start direct fuel sales.
Source: Business Standard
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Mukesh's decision to take pay cut commendable: Khurshid

The government today lauded RIL chief Mukesh Ambani's decision to take a pay cut and said that the industrialist has shown a "remarkable sensibility" towards the prevailing scenario with this voluntary step.

"What Mukesh Ambani has done is laudable...It's a good decision," said Corporate Affairs Minister Salman Khurshid, who recently sparked a debate on executive compensation by advising the industry to shun vulgar CEO salaries.

Yesterday, the country's top corporate house Reliance Industries announced that its Chairman and Managing Director Mukesh Ambani would take a pay cut and it was capping its top compensation of its top executives.

"This is part of a larger debate among corporates themselves and the government would be happy to engage in the debate," Khurshid told reporters here.

"It is about corporate governance, which is not about remuneration alone. It's about internal auditors, about shareholders, about disclosures and accountability.

"But taking a cut in remuneration is the most visible issue as far as the public is concerned. Whatever voluntarily a person like Mukesh Ambani has done shows remarkable sensibility to the prevailing thought process in the entire country," the minister said.

RIL has said that its CMD would draw a salary of Rs 15 crore for 2008-09 fiscal, down nearly two-third from over Rs 44 crore last year, and this reflected "his desire to set a personal example of moderation in executive compensation".

Khurshid further said that the percentage of the cut was not important "although they are indicative of intention".

"I think the principle is important. But Mukesh Ambani has certainly set an example but everybody is placed differently. I don't think you can have a single rigid rule. It indicates that the corporates are involved in the same sensitivity and priority as the rest of the country."

After Khurshid sought industry's restraint from "vulgar" salaries, Planning Commission Deputy Chairman Montek Singh Ahluwalia had also said that there should be no "indecent" compensation for CEOs, although industry associations have maintained that salaries are best decided by company Boards and shareholders.

From now on, RIL has also decided to adopt the capped structure method of deciding executive compensation in RIL, instead of pegging it as a percentage of net profit.

Consequently, Mukesh's salary is lower than not only many other industrialists in India, but also CEOs of RIL's global peers like ExxonMobil and Shell.

Even Anil Ambani recently announced that he would not take any salary or commission from any of his five listed group companies for 2008-09.

Source: Economic Times

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RIL to expand refinery anew

Mukesh Ambani promoted Reliance Industries (RIL) plans to increase the capacity of its new refinery by 21-24% over the next 6-8 months.

RIL acquired the refinery soon after its completion through a merger of subsidiary Reliance Petroleum (RPL) with itself. The move made it the owner of the largest single-location refining capacity in the world, at around 1.2 million barrels of crude per day.

The new refinery has a design capacity of 580,000 barrels per day, or 29 million tonnes per annum (mtpa), and is capable of juggling production between different crude distillates as petrol and diesel.

The unit has been running around 12% above capacity since it started functioning in December, Reuters reported Maurice Bannayan, senior vice-president, RIL as saying in the UAE on Wednesday. "Currently it is running at 650,000 barrels per day, we are planning to do some consolidation that will be up to 700,000 or 720,000 (barrels per day) in 6-8 months," Bannayan told the news agency.

The new refinery, in fact, is processing more crude than RIL's older refinery, which has a capacity of 660,000 barrels per day (33 mtpa), but has lower secondary-processing ability.

Secondary processing capacity, measured by the Nelson Index, allows refineries to produce more of a certain type of product, such as Petrol, by breaking down less profitable products such as industrial fuels.

With a score of 14 on the Nelson Complexity index, the new unit can process heavy-crude varieties and produce superior quality products, well beyond Euro-IV specifications.

Source:http://www.dnaindia.com/money/report_ril-to-expand-refinery-anew_1299101

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India's Reliance to finalise US acquisitions by end 09

India's Reliance Industries RELI.Bo, the owner of the world's biggest oil refining complex, is in advanced talks to acquire refinery and petrochemical units in the U.S. and Europe and could finalise a deal by end-2009, a senior company executive said on Wednesday.

"We are in advanced talks with looking at refinery and petrochemical units for acquisition in the U.S. and Europe, mostly in the U.S.," Maurice Bannayan, senior vice president at Reliance Industries told Reuters on the sidelines of an industry event.

Source: http://www.reuters.com/article/mergersNews/idUSLE46994020091014

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RIL named among 25 sustainable value creators globally: BCG

Mukesh Ambani-led Reliance Industries has been named as the world's fifth biggest 'sustainable value creator' in a list of25 top companies globally in terms of investor returns over a decade.

The petrochemicals giant is the only Indian company on the list, which has been topped by US-based pharma major Gilead Sciences and has been compiled by Boston Consulting Group in an annual report from its Value Creators series.

RIL is ranked even higher than NRI billionaire Lakshmi Mittal-led global steel major ArcelorMittal, and also many other global giants like BHP Billiton, Samsung, Tesco, Rio Tinto, BASF, McDonald's, Colgate-Palmolive and Procter&Gamble.

In the top five, Gilead Sciences is followed by IT major Apple (2nd place), British American Tobacco (3rd), Brazilian mining major Vale (4th) and RIL (5th).

The report, 'Searching for Sustainability: Value Creation in an Era of Diminished Expectations' has identified 25 firms, with a market capitalisation of at least USD 30 billion, that have consistently outperformed their local stock-market average during the 10 years from 1999 to 2008.

"Companies suffering a massive decline in stock market valuation in the wake of the global economic crisis should learn the lessons of an elite group of so-called sustainable value creators that have generated sizable and sustainable shareholder returns over a decade," the BCG report stated.

Source: Economic Times

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RIL contribution to oil and gas industry

Gas output to rise 98%, oil 29-33% by 2012-13: report

In spite of a poor response to Nelp VIII and CBM IV auctions, the country’s exploration and production (E&P) is set to scale greater heights. The country is under explored, with only 22% of its exploration acreage being moderate-to-well explored and a significant part of the unexplored acreage is highly prospective. Reliance Industries (RIL) is set to emerge as the largest gas producer and CIL, as a major oil producer when their production ramps up. Both have started production from their discoveries in 2009.

According to a Merril Lynch report, ‘Indian E&P -on the cusp of next exciting phase’, production from discoveries made by RIL, Oil & Natural Gas Corporation (ONGC) and Cairn India (CIL) will start in 3-4 years and boost the output of gas by 25-30 billion cubic meter (bcm) from the 2010-11 levels. Besides, when RIL’s K-G D6 gas output ramps up, the country’s gas output is expected to jump by 98% and when CIL’s oil output ramps up in 2011-12 and 2012-13, the country’s oil output will rise by 29-33%.

RIL is expected to produce 36-46 million metric standard cubic meter per day (mmscmd) from the 9 satellite fields in the K-G D6 block and 6 discoveries in the NEC-25 block. ONGC is expected to produce 25 mmscmd of gas and 20,000 barrel per day of oil from its discoveries in the KG-DWN-98/2 block and the adjoining nomination blocks in 2012-13. Also, Gujarat State Petroleum Corporation Limited (GSPC) is expected to start the production of gas from its discoveries in the shallow water K-G basin block KG-OSN-2001/3 in 3-4 years. The peak output rate is estimated at 6-9 mmscmd.

The report also states that 106 discoveries have been made in 31 Nelp (new exploration licening policy) and pre-Nelp blocks since 1999-2000, including two-world class discoveries in K-G D6 and RJ-ON-90/1 by RIL and CIL, respectively. There is a significant scope for reserve accretion in each of these blocks.

Source: www.financialexpress.com

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Reliance Industries aid to flood-hit in AP: Donates Rs.11.11 crore to CM Relief Fund

Reliance Industries Ltd today came to the aid of the flood-hit people of Andhra Pradesh and donated Rs 11.11 crore (Rupees eleven crore and eleven lakh) to the Chief Minister’s Relief Fund.

Mr P M S Prasad, Executive Director, RIL and P V L Madhava Rao, AP Coordinator, met Andhra Pradesh Chief Minister Mr K Rosaiah at his office and presented a cheque for RS.11.11 crore.

Speaking on the occasion, AP Chief Minister Mr Rosaiah said: “The recent unprecedented natural calamity in the state has inflicted unimaginable damage by rendering millions homeless and damaging crops in lakhs of hectares. The relief and rehabilitation measures pose a challenge that can be effectively met only with support from all sections of the society. We welcome the generous gesture from Reliance Industries.”

Mr P M S Prasad said that Reliance Industries will always be in the forefront in responding to crises thrust by nature and will spare no effort in alleviating the suffering of the affected people. In this context he elaborated on the relief work done at field level by RIL’s teams. “Our volunteers have already distributed 2.5 lakh water pouched, about 1.2 lakh biscuit packets, 5,000 kits of ration and utensils to the needy in Krishna and Guntur districts. We are also planning to distribute seeds to the farmers, removal of silt at places and river gauging in a long stretch with flood markings..

In the ongoing relief works, RIL is providing 3-meals per day to about 2,800 flood victims at relief camps in Vijayawada city. Besides, 40,000 kg of cattle feed was distributed in the marooned villages of Guntur and Krishna districts.

Source:http://www.business-standard.com/india/news/reliance-industries-aid-to-flood-hit-in-ap/373167/
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Full statement By Reliance Industries

Reliance Industries Ltd. (RIL) has noted the comments made by Shri Anil D Ambani with the care and concern they deserve.

RIL welcomes this statement, and hopes that it is a positive change in the negative, calumnious and malafide campaign launched by R-ADAG against RIL. RIL believes that there is no contentious issue in the world that cannot be resolved satisfactorily through mutual dialogue, provided the proposal for reconciliation is anchored in good and honest intentions RIL has always maintained that the dispute under litigation is not merely a family matter, as Shri Anil Ambani’s statement once again tries to make out to be. Vital national interests in terms of securing government’s revenue from the natural gas, the government owns and GoI’s sound policy framework for promoting India’s energy security, are at stake. The interests of RIL’s shareholders are also at stake. RIL does not belong to a family. It belongs to shareholders, to those associates who have made this journey possible and most importantly to the nation, India.

Issues which arise out of a decision of the Bombay High Court transcend any private differences between two brothers or two corporate entities, can now only be decisively resolved by a decision of the Highest Court. RIL sincerely hopes that any overture for rapprochement to end acrimony are sincere and in no way related to the ongoing hearing of the case in the Honorable Supreme Court.

Sadly, the conduct of R-ADAG so far makes it difficult for RIL to believe that Shri Anil Ambani has had a real change of heart. For last many years, Sh. Anil Ambani has indulged in a malicious campaign against RIL and its chairman. The campaign reached its nadir in recent months through a vicious series of advertisements, unprecedented in India’s corporate history. RIL while denying all the false accusations has responded to this campaign with dignified silence.

What is both saddening and perplexing is that Shri Anil Ambani has yet again sought to communicate to RIL and its Chairman through the public domain
, whereas he could have easily contacted his elder brother directly. In order to demonstrate that his intentions behind the latest overture are bonafide, we urge Shri Anil Ambani to put his sentiments into actions. We can now only hope, that the deeds of Shri Anil D Ambani and his associates are reflective of the emotions expressed in the statement. In the last 48 hours itself, Shri Anil Ambani & R-ADAG have made allegations against the Group and its directors which are not only untrue but increasingly hurtful. Hopefully this way of engagement shall also change. On its part, both the RIL Chairman as also RIL have always wished him well and will continue to do so.

Finally RIL welcomes this positive indicator and will not be found wanting in responding to them constructively.

Reliance Industries Limited (RIL) is India's largest private sector company on all major financial parameters with a turnover of Rs. 1,50,771 crore (US$ 29.7 billion), cash profit of Rs. 21,566 crore (US$ 4.3 billion), and net profit (excluding exceptional income) of Rs. 15,607 crore (US$ 3.1 billion) as of March 31, 2009.

RIL is the first private sector company from India to feature in the Fortune Global 500 list of 'World's Largest Corporations' and ranks 103rd amongst the world's Top 200 companies in terms of profits. RIL is amongst the 30 fastest climbers ranked by Fortune. RIL features in the Forbes Global list of the world's 400 best big companies and in the FT Global 500 list of the world's largestc ompanies. RIL ranks amongst the 'Worlds 25 Most Innovative Companies' as per a list compiled by the US financial publication-Business Week in collaboration with the Boston Consulting Group.

Source: Economic times
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Gas MoU not binding on company, says RIL

Reliance Industries (RIL) on Tuesday told the Supreme Court that its chairman, Mukesh Ambani, had signed a memorandum of understanding (MoU) containing provisions promising supply of natural gas to the Anil Ambani Group in his personal capacity. The company’s board of directors had not seen the MoU and had not approved it, an affidavit filed by RIL claimed, an assertion backed by seven company directors who filed separate written statements.

The affidavit goes on to say the provisions of the MoU were not binding on RIL. Mukesh Ambani’s firm sought permission of the court to place the minutes of two board meetings of August 2, 2005, and August 5, 2005, on record to support this claim.

According to the MoU signed in 2005, as part of a settlement dividing the Reliance empire, RIL is to supply 28 million standard cubic metres per day (mmscmd) of gas to RNRL at $2.34 per million British thermal unit (mmBtu). This price is at a 44% discount to the price of $4.20 per mmBtu fixed later by the government for sale of gas by RIL to some power and fertiliser companies. RNRL says it has a binding contract for supply of gas at a price of $2.34. RNRL officials said they would not be able to comment as the matter was sub-judice.

The point about the Ambani family members signing the family MoU in their personal capacity is only one among a litany of arguments put forth by RIL in response to a special leave petition filed by RNRL in the Supreme Court.

RIL also moved a separate application in the apex court on Tuesday to place on record the ‘Listing Particulars’ dated August 23, 2006, of RNRL’s Global Depository Receipts (GDR) which are listed in the Luxembourg Stock Exchange.

RIL said the information contained in the ‘listing particulars’ strengthened its case in the dispute with RNRL over supply of KG gas. “RNRL has sought to create an impression in the SLP — in the apex court on supply of KG gas from RIL at discounted price — that the benefits of the lower gas price will be passed on by RNRL to the consumers of electricity, i.e. the common man. But the contents of the listing particulars reveal that RNRL will sell the gas to its affiliated power companies at prevailing market price,” said RIL, in its application.

“At such market price of gas in India, RNRL would make a windfall trading profit exceeding Rs 21,000 crore per year aggregating to an astronomical amount of Rs 3,50,000 crore over 17 years without RNRL making any investments whatsoever,” the affidavit alleged. “If RNRL’s demands were granted, the government would lose large sums of money in profit sharing, royalties and taxes. RNRL would reap a windfall at the expense of the government and RIL and its shareholders,” said RIL in the affidavit.

RIL also said it is merely a contractor and bound by the government’s policy on gas and it thus could not sell gas to RNRL at $2.34. “Marketing freedom under the PSC (Production Sharing Contract) is not absolute, but rather circumscribed by the provisions of the PSC and the policies and directions of the government,” said RIL in its affidavit. It added that “what RNRL demands in this case is contrary to the provisions of the production Sharing Contract — PSC entered into between the Union of India and RIL — and the gas utilisation policy promulgated and the consequent directives of the Government of India”.

It further said, “RNRL seeks to obtain a lion’s share of the KGD6 gas despite the fact that it has not built a single power plant since the de-merger and the ADAG Group owns just one gas plant which consumes a minuscule quantity of gas”.

The apex court is scheduled to take up the issue on October 20. The ministry of petroleum and natural gas had moved the apex court seeking quashing of a Bombay High Court order directing RIL to supply gas to RNRL at $2.34 per mmBtu. RIL had also moved the Supreme Court challenging the Bombay High Court order that asked it to supply 28 mmscmd of gas to RNRL at $2.34 per mmbtu.

RNRL, on the other hand, approached the apex court against a part of the Bombay High Court judgment. RNRL had said the high court while directing that the Gas Supply Agreement ought to be amended should have given final and effective directions for amendment of such agreement to make it bankable.

Source: ET
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RIL announces bonus issue of 1:1 Dividend of 130%, Payout of Rs. 2,219 crore

The Board of Directors of Reliance Industries Ltd today proposed, subject to shareholders approval, issue of bonus shares in the ratio of one share for everyshare held in the Company.

The Board also proposed interim dividend of Rs 13 per share for the financial year 2008-09. This will result in a payment of Rs. 2,219 crore inclusive of taxes of Rs. 322 crore. Both the bonus shares and dividend will accrue to the shareholders of erstwhile Reliance Petroleum Ltd which has been amalgamated recently with the Company.

RIL has completed major project in a flawless manner. We expect our track record of strong value creation to continue. The proposal for bonus and dividend continue Reliance’s tradition of rewarding shareholders on a sustained basis.

Since its listing in 1978, total returns to Reliance Industries shareholders are 25% compounded. Since the demerger, Reliance Industries has created value of Rs. 2,47,000 crore in market capitalization. Shareholders have earned 40% compounded return.

During the past four years, in the period of significantly higher capital costs, shortage of financial capital globally and constrained resources for large scale projects, Reliance has commissioned two of its largest global scale projects in the energy sector.

The commissioning of these projects has created several milestones in Reliance’s Corporate history.

Refining:

Reliance owns nearly 25% of the world’s complex refining capacity. Reliance now operates the largest refining complex at one site globally. It has enabled Jamnagar to become the refining capital of the world.

Reliance is the only company in the world to have built two large super-size complex refineries in the last decade.

Reliance is now among the largest producer of ultra clean fuels in the world.

Reliance is the only large refining company in the world today that operates its facilities in excess of 100% of rated capacity.

Upstream:

Reliance has achieved flawless execution of its KG D6 project and has achieved a ramp up to nearly 40 mmscmd of gas in less than 180 days from startup. This is a new global benchmark.

Reliance has developed the project in the shortest possible time despite very significant challenges in terms of costs, availability of rigs, technical and offshore services.

The KG D6 production ramp up is on track with 100% uptime achieved since the facility has gone on stream on April 1st, 2009. During this time we have produced a cumulative of 2.7 million barrels of oil and 5 billion cubic meters of gas and successfully started up 16 out of the 18 wells that are required to achieve maximum capacity. Reliance has among the lowest finding and development costs for any deep water oil and gas development in the world – either completed or under implementation.

At full capacity, production from these facilities will be equivalent to 40% of India’s current hydrocarbon production. The project remains unparalleled in terms of execution despite all the odds stacked against it.

The availability of gas at the government approved prices of $ 4.2 per mmbtu is wealth for millions of farmers and consumers through improved availability of fertilizers and power.

The beneficial impact of reduced subsidy and imports aggregates to several thousand crore annually. (Based on a recently concluded long term contract of gas, RIL’s gas supply at $ 4.2 per mmbtu translates into a saving of Rs. 25,000 crore annually) Reliance is now the largest exporter in India. Its two projects are making a meaningful contribution to the growth in industrial production and overall economic activity during the current fiscal year.

Reliance is now ready to invest for the future. It has a strong Balance Sheet, large cash reserves and substantial financial flexibility owing to its Treasury Stock holding which have a current value of nearly Rs. 40,000 crore. It also has operating experience and project execution skills at par with global energy majors.

Reliance has built new businesses and invested in globally competitive capacity consistently to create value for all its stakeholders.

Commenting on above, Mukesh Ambani, Chairman stated “We had committed to reward our shareholders on successful completion of our two world class projects. I am really delighted to share with you the excitement we all have in flawless execution of the upstream project which has been recognized globally as a defining accomplishment.

Our refinery project has also set new benchmarks and made Reliance the operator of the largest refinery site anywhere in the world. These are achievements that we should all have pride in and are milestones in our journey of creating value for our shareholders”.

Source:

http://www.thehindubusinessline.com/businessline/stocks/announcements/reliance_industries_ltd_081009.pdf
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Dabhol Power Plant starts drawing gas from Reliance Industries resulting in Lower Cost of Generation

The Dabhol power plant has started buying natural gas from Reliance Industries to cut electricity generation cost at the country's largest gas-fired unit.

"We started drawing (RIL's) KG-D6 gas from today. The volumes were around 4.5 million standard cubic meters per day," said A K Ahuja, Managing Director of Ratnagiri Gas and Power Pvt Ltd, the company that runs the 2,150 MW power plant and adjoining LNG receipt facility in Maharasthra.

The government had this month more than doubled RGPPL's allocation from KG-D6 to 5.67 million standard cubic meters per day that will help generate about 1,000 MW of electricity.

"We are currently operating three gas turbines producing 920-930 megawatt of electricity. We will add another 320 MW turbine by November-end, when the drawal would increase to 5.6 mmscmd," he said.

RGPPL was initially allocated 2.7 mmscmd of gas for the period between April and September but the company had not drawn even a single unit as it had a running contract with Petronet LNG Ltd to buy imported liquefied natural gas.

It paid a burner-tip price of USD 7.8 per million British thermal unit for the regassified-LNG sourced from Petronet.

"The delivered price of KG-D6 gas would be USD 6.2 per mmBtu," Ahuja said adding the cost of electricity generation will come down to about Rs 4 per unit from Rs 4.70 earlier.

Source: BS

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