Reliance sees Colombian exploration deal soon

Published on Jan 25, 2006 08:15 PM IST

Reliance's likely move into Colombia comes amid a growing prominence of India's companies on the world stage.

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None | ByReuters, Davos (switzerland)

India's largest petrochemicals producer Reliance Industries expects to seal a deal on exploration rights with Colombia's state oil company Ecopetrol by the second half of 2006 at the latest.

"We would like the maximum amount of exposure. We are in negotiations with the government," Reliance Chairman Mukesh Ambani said on Wednesday at the World Economic Forum in Davos.

"We hope (to have a deal) at the latest by the second half of this year," said Ambani, declining to say how much Reliance would spend on buying the exploration rights in Colombia's Gabriel Block.

Reliance's likely move into Colombia comes amid a growing prominence of India's companies on the world stage.

Earlier this week, Reliance said it planned to raise $1.1-$1.3 billion in an initial public offering by a subsidiary to help fund a $6 billion refinery expansion and also planned an initial $750 million move into retail.

Ambani said Reliance was open to foreign investors taking part in the IPO. Under Indian rules, up to 60 per cent of new shares issued under a flotation can be allocated to foreign investors.

Using the proceeds from the IPO and $3.5 billion in debt, Reliance's unit Reliance Petroleum plans to nearly double capacity at its 660,000 barrels-per-day facility, making it the world's single largest oil refinery.

Ambani said once the new refinery was up and running all of its petroleum products would be exported. He said Reliance would own 80 per cent of Reliance Petroleum's equity after the IPO.

The refinery will be based in a special economic zone in Jamnagar in Gujarat.

Reliance's shares finished down 0.76 per cent at Rs 688 in Mumbai.

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