Reliance Industries Plans $2 Billion Investment In US Shale Gas Assets Reliance Industries Ltd has planned to invest $2 billion (around Rs.12,000 crore) in its three shale assets in the US, betting big on the potential of extracting natural gas and oil from the sedimentary rock formations. The company nhas already invested $7.3 billion since 2010 towards development of shale gas and oil in the US market. Now it has firmed up the new investments in the three joint ventures it has in the US. Gas pricing issues in India have deterred RILs domestic investment in exploration and production (E&P). However, the company has been steadily increasing its interests overseas with its bet on the shale oil and gas ventures, which have become a revenue generator for the company in a short span of three years. According to the companys June quarter results announcements, its shale gas operations posted a 26% increase in revenue to $270 million (Rs.1,620 crore) and 22% rise in operating profit to $201 million (Rs.1,206 crore) from the year-ago period. Its share of production from the shale business stood at 15 million metric standard cubic meters per day (mmscm) of gas, higher than its production of 8 mmsc of gas daily from the D1 and D3 fields of the D6 block in the KG basin. The $2 billion of additional capex planned for the shale ventures will be largely directed towards the Marcellus region in the eastern part of the US where the company has agreements with Chevron, and Carrizo Oil and Gas Inc. In 2010, RIL ventured into the fledgling shale gas business in the US through joint venture agreements with three companies - Atlas Energy Inc., (now owned by Chevron) and Carrizo Oil and Gas Inc., in the prolific Marcellus region in south-western Pennsylvania and with Pioneer Natural Resources Co. (PNRC) in the Eagle Ford shale acreage, in the Texas region of the US. It had invested a total of $2.046 billion in acquiring the stakes, giving it access to 12 trillion cubic feet of reserves. In the JVs with Pioneer and Carrizo, the business has already turned profitable and cash flows from the business are enough to fund the incremental capex there. Therefore, the new capex is meant for the stake with Chevron. energysector.in/petroleum-news/reliance-industries-plans-2-billion-investment-in-us-shale-gas-assets
Posted on: Sat, 23 Aug 2014 10:04:19 +0000
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