RIL oil reserves at $352 b
At the current price of crude, Reliance Industries is probably sitting on oil-equivalent reserves worth $352 billion at the current oil price of around $80 a barrel.
For the arithmetically challenged, that’s Rs 14 lakh crore or 14 followed by 12 zeroes.
This is the first time that Mukesh Ambani, the chairman and managing director of India’s most valuable company (market capitalisation of $91 billion), has given a public estimation of the company’s oil and gas potential.
In fact it was the first time that the RIL chairman referred to the oil and gas reserves which the company has been accumulating across continents spanning countries such as India, Columbia, Yemen, Oman, East Timor, Egypt and Russia.
“Currently, the global “2P” gross reserve base of Reliance is estimated at about 4.4 billion barrels of oil equivalent,” Mukesh Ambani told shareholders at the 33rd annual general meeting.
2P in oil industry parlance means there is a 50 per cent chance of the estimate being accurate.
At current crude prices of $80 a barrel, that’s worth $352 billion.
While this itself would make many companies sit on their laurels, Reliance Industries is hungry for more.
“We have set for ourselves a target of 10 billion barrels of oil equivalent of 2P gross reserves globally,” the CMD said.
If Reliance achieves the target, the value of oil equivalent owned by the company, could well touch $800 billion at the current price of $80 per barrel.
“The pathway to this target will also involve engaging in several world-class partnerships and will place Reliance well on the path to be a global energy major,” Ambani said.
RIL to achieve this target will expand overseas aggressively to build a oil, gas and chemicals monolith.
The company will use its strength in the domestic market to drive the expansion and create “unprecedented” value for shareholders, promised Mukesh Ambani on Friday.
Reliance will ALSO stretch its boundaries to build petrochemicals businesses in Egypt and Russia.
There has been speculation for some time now that Reliance Petroleum’s the world’s largest refinery project will be completed ahead of schedule.
Confirming this, Mukesh Ambani said it will be ahead of schedule next year at ‘half the capital cost’ of international refineries of similar size.
Unveiling RIL’s expansion plans in this sector, he said Reliance will be investing $8 to $9 billion in the Jamnagar “Super site”, with considerable profitability potential.
It will also by the middle of next year begin to pipe 80 million cubic meters of gas a day from its largest field, two times the country’s output of the fuel.
Ambani alluded to several world-class partnerships to achieve the ambitious targets it has set.
For RIL shareholders, the oil and gas exploration and production is on the threshold of “unprecedented value creation” for Reliance and is going to “fundamentally transform Reliance’s earnings growth profile,” Ambani said.
