RIL to invest $5 bn in US shale assets in next 5 years

Reliance Industries Ltd (RIL), the energy to retail conglomerate, today said it would invest around $15 billion (Rs 66,800 crore) in the next five years in its petrochemical business and to develop shale gas assets in the US.

RIL’s chief financial officer, Alok Agarwal, in an address to the media, said the company had already paid $943 million to buy three shale gas assets in the US and would spend around $2.5 billion towards drilling of wells at these assets.

The company said while drilling had already begun for its Atlas and Pioneer shale gas acreages, it would begin drilling at Carrizo during this quarter.

Agarwal added earnings for the quarter could have been higher by seven per cent but for rupee appreciation, a 70-day production loss at Panna-Mukta-Tapti oil and gas fields due to a forced shutdown and a maintenance shutdown of its cracker complex.

The company reported its highest quarterly profit since December 2007 in the September quarter. Its net profit jumped 27.8 per for the quarter to Rs 4,923 crore, up from Rs 3,852 crore in the same quarter of the previous year. Its revenues also went up 23 per cent to Rs 59,962 crore from Rs 48,843 crore in the corresponding quarter last year.

The company, which has two refineries at Jamnagar in Gujarat, expects the refining and petrochemical margins to improve next year. This quarter, the refining margin was $7.9 per barrel, up 31.6 per cent as compared to $6 per barrel in the second quarter of 2009-10.