In a major shift in its business strategy, India’s largest private sector company, the Rs 337,000 crore Reliance Industries Ltd (RIL), said it is open to partnerships in the oil and gas sector rather than exposing the company to big risks in any single project.
“One of the biggest lessons learnt by us (RIL) is that never ever expose the company to a $10 billion (Rs 49,000 crore) plus risk as it has done for its one project (the KG-D6 gas project),” RIL’s executive director, P M S Prasad told Hindustan Times. Prasad has recently been appointed as a full time director on the board of RIL.
“I have told Mr (Mukesh) Ambani that there is no way that I will ever come back to him and ask for an amount as big as $10 billion for a single project. Why take the trouble and expose the company to such risks?”. Reliance, he said, has now decided to change its strategy for bidding in future oil and gas blocks in India.
“We have realised that in our anxiety to do things in least possible time and for creating world-class benchmarks, nobody is going to give us a Bharat Ratna or a Padam Shree. What we have got at the end is just brickbats,” said Prasad. It is better to share risks and costs through joint ventures, he said.
“Reliance has already identified partners and in case of any good oil and gas block coming its way in the new oil and gas bidding round (the NELP-8 round), currently open for bidding, it would go by the JV route instead of its earlier strategy of being an operator in the block with a majority stake,” Prasad said.
KG-D6 is the offshore oil and gas block of Reliance on the east coast of India. In 2002, Reliance had stuck huge gas in its KG-D6 block, putting India on the global energy map. It was the world’s biggest gas discovery in 2002.