Reliance Industries Ltd (RIL) has signed an oil exploration-to-refining deal with Mexico’s national oil company Petroleos Mexicanos (Pemex) as it looks at overseas opportunities to overcome disenchantment back home.
RIL and Pemex will look at potential upstream oil and gas business opportunities in Mexico as well as explore international markets for “value added opportunities,” a company statement said.
The deal comes as Mexico, the world’s tenth-largest crude producer, opens up its energy sector with the ending of Pemex’s decades-long monopoly. State-owned, Oil and Natural Gas Corp (ONGC) had previously signed a memorandum of understanding (MoU) with the Mexican firm.
RIL, the owner of the world’s biggest refinery, said its tie-up with Pemex was in line with its strategy to expand its international asset base in regions with “attractive competitive opportunities.”
An MoU was signed by RIL’s oil and gas head PMS Prasad and Pemex chief executive Emilio Lozoya in New York.
“The MoU envisages sharing of RIL’s pioneering expertise in deep-water development and best practices in East Coast of India and RIL’s experience in shale gas in United States,” the statement said.
RIL, which entered into the oil and gas business in 1990s with the setting up of India’s biggest refinery at Jamnagar in Gujarat and then expanding into upstream oil and gas exploration, is re-orienting its hydrocarbon business after encountering several challenges.
Out of the 45 oil and gas exploration areas or blocks it acquired in India since 1999, as many as 38 have been surrendered after having sunk $2.09 billion.
In spite of 52 oil and gas discoveries since 2002, it has managed to bring only three of them into production to date, as it ran into regulatory hurdles, pricing and cost recovery disputes and delays in getting critical approvals.
RIL has since then started looking for opportunities overseas — from Myanmar to Mexico.