British Petroleum keen to invest in RIL

TNN / Oct 18, 2005, 01:20 IST

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The visit of Lord Browne, wasn't just confined to announcing an investment in a new 9 million tonne refinery promoted HPCL at Batinda.

MUMBAI: The recent visit of Lord Browne, the chairman of British Petroleum, wasn't just confined to announcing an investment in a new 9 million tonne refinery promoted by the state-owned Hindustan Petroleum Corporation (HPCL) at Batinda.
Browne's meetings with the top bosses of India's industrial houses was more than courtesy meetings. With Ratan Tata, he discussed expanding their joint venture for producing solar power for the rural masses.
But Browne's big bet was a possible partnership with Reliance Industries, by investing in a sizeable equity stake in Mukesh Ambani's gas find in the Krishna Godavari (KG) basin.
Browne spent the better part of his whirlwind two-day tour, hobnobbing with who's who at the national and commercial capital. But sources say he was...

... especially keen to discuss investments in Reliance's gas project.
He is said to have had an inkling that the world's top two energy companies - Exxon Mobil and Chevron - were scouting for a similar deal with RIL.
It isn't clear whether Mukesh made any real commitment to the proposal. RIL officials declined to comment on the proposal.
Krishna Godavari basin is the second largest gas find in India with estimated reserves of 14 trillion cubic feet, according to UK-based energy consultant Wood Mackenzee.

Canada's Niko resources hold 10% stake in the venture while the remaining stake is held by RIL. RIL has earmarked an investment of Rs 25,000 crore over the next five years for developing and marketing gas.
For RIL, partnering BP could open up a wider global market for its gas. BP owns LNG terminals across south east Asia, which can be used by Reliance to re-gasify and then cater to the Japanese and Chinese market, two of the...
... world's largest importers of oil and gas. Besides, RIL could access BP's technological expertise in deep-sea exploration.
In fact, when RIL began its exploration in the KG basin, it did not have the requisite skills. It had to assemble a team of technologists from ONGC as well as some expatriates.
For the $285-billion BP, which has access to one of the largest gas reserves in the United States, the benefits of investing in RIL's gas venture cannot be understated.
Gas consumption, in India, is still negligible and the gas from RIL's Krishna Godavari basin is expected to fire power and fertiliser plants along the east coast. A stake in the...
... project will give BP a foothold in India's energy business.
During his visit, Lord Browne indicated that BP would be interested in exploration and production (E&P) and also export refining, apart from its investment in the joint venture with HPCL.
BP is also planning to market a cheap stove that will use gas and wood pellets, in an effort to increase the use of gas among households.
Lord Browne had specified no time frame for additional investments but had categorically stated that he would like to increase BP's interests in India soon.
Just before his flight back Browne was so convinced about India growth story that his parting remarks were "I want to invest more in India."

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