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Reliance Industries eyes giant project in Russia

Reliance Industries Ltd (RIL) is eyeing a greenfield petrochemical project or midstream pipeline in Russia, reports Arun Kumar.

india Updated: Jan 24, 2007 20:01 IST
Arun Kumar

Reliance Industries Ltd (RIL) is eyeing a greenfield petrochemical project or midstream pipeline in Russia. According to highly placed company sources, these projects will be under a joint venture in which RIL would be a majority partner, or at least, an equal partner.

Chairman and Managing Director Mukesh Ambani is expected to meet the Russian President Valdimir Putin to explore the possibilities of rolling out its expansion plan in the region during the leader's two-day visit to India that begins on Thursday.

"We are looking at upstream businesses which include petrochemicals and pipelines," a source in RIL said on condition of anonymity.

In fact, Ambani put off his visit to Davos for the World Economic Forum meeting this week and will instead be part of the Indian delegation to discuss business issues with the Russian President.

"This clearly shows the intent of the group, but nothing can be said at this point of time as nothing has been finalised as of now," an informed source said.

"In case things move positively, it will be a mega project that will be globally competitive and it must leverage the availability of raw materials locally," the source added.

"The intent is to capture the Europe and Central Asia, which is a large market."

A Reliance spokesman declined comment on the subject.

Industry experts say Ambani also wants to participate in downstream projects in Russia, particularly in oil exploration and production (E&P).

However, Russia has so far shown reluctance in inviting investments in E&P. Industry sources say public sector state-run Oil and Natural Gas Corporation (ONGC) and Reliance are keen on participating in the Sakhalin III project in the Far East Russia.

In 2003-04, ONGC had formed a consortium with Reliance Industries and Indian Oil Corp (IOC) to buy out a majority stake in Sibneft, the fifth largest oil company in Russia, for about $15 billion.

ONGC had also involved Russian state-run Rosneft in the acquisition by offering it a 26 per cent stake and a joint operator status but the acquisition could not be completed due to procedural delays on the part of the state-run firm. After Sibneft, Reliance has not looked at any oil property in Russia.

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First Published: Jan 24, 2007 16:59 IST