Archive for May, 2013

RIL to Help India Cut its Gas Imports to half by 2020

May 28, 2013

Reliance Industries Limited (RIL), headed by Mukesh Ambani , will bring down the cost of gas import incurred by the government by 2020. The company is optimistic after the government approved its expansion plans for discovery of new blocks on KG-D6 basins. However, the company had submitted its proposals in 2010 for expansion and digging the existing wells to find new sources of natural gas and petroleum. The initial nod from the government even helped a major discovery of a huge gas block in KG-D6 located in Bay of Bengal.

Furthermore, the government is currently granting permissions for future expansions to accentuate output and help India to cut down its import expenses to half by 2020. In the last financial year, there was a whooping $151 billion oil import bill on the government which propelled current account deficit to a record and also led to a weakened rupee and accelerated the country’s inflation rate.

Mumbai-based Executive Director of RIL, Mr. P.M.S Prasad said, “The approvals have started coming in after nothing was happening for three years. This year, we drilled a new well looking for more gas; submitted plans to produce from discoveries, got budgets approved and resolved various issues. Things are moving now.”

For a stabilized economy of the country, the gas price will also play an important role. The production of gas will be dependent on the price it is accounted for. Chakravarthy Rangrajan, chief of the prime minister’s Economic Advisory Council, wants that gas prices in India should be average when compared to those in US, UK and Japanese imports.

According to a study, India has 27 trillion cubic feet of undiscovered gas reserves in non-developed fields. India’s 12 major petroleum basins may hold another 64 trillion cubic feet of gas. B.Ganguly, President of RIL’s petroleum exploration and production business said, “There is a lot of gas in India waiting to be developed and produced. It’s important these get government and regulatory approvals and market price to help the nation cut imports.”

European Petroleum giant, BP has partnered RIL in KG-D6 basins. They plan to invest $5 billion in developing the current fields and exploring new fields which have around 4 trillion cubic feet gas reserves in the block. This amount is equivalent to India’s two years of gas consumption. Recently, BP’s board of directors visited onshore gas terminal on the east coast. “BP’s directors visited our facilities and said it was one of the nicest projects they have seen in the entire world. They were happy with the projects we’re planning and with the positive regulatory environment in the country,” said Prasad.

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RIL Head Mukesh Ambani Gives Up Rs 24 Crore in Salary For Fifth Year In A Row

May 16, 2013

Chairman and Managing Director of the country’s biggest private sector entity Reliance Industries Limited (RIL), Mukesh Ambani is setting an example for moderation in managerial compensation levels. He has kept his annual salary at Rs 15 crore , foregoing Rs 24 crore from the remuneration approved for him by shareholders.

Ambani has not deviated from this salary level since the fiscal year 2008-2009. In the recently published annual report the company said that, “The Chairman and Managing Director’s compensation has been set at Rs 15 crore as against Rs 38.93 crore that he is eligible as per the shareholder’s approval, reflecting his desire to continue to set a personal example for moderation in managerial compensation levels.”

Mukesh Ambani is eligible for a pay package of Rs 38.93 crore from the last fiscal year. His actual salary is 23.93 crore lesser than the pay package.

In the last fiscal year of 2011-2012, Ambani had foregone his salary by Rs 23.93 crore. He had decided to stagnant his salary at Rs 15 crore in Oct 2009. There was a debate on-going at that time that discussed the right-sizing of CEO salaries. He was the country’s top paid executive when he decided to cap his salary which dropped from Rs 44 crore to Rs 15 crore in the year 2008-2009.

His remuneration includes Rs 4.16 crore as base salary, Rs 60 lakh towards prerequisites and allowances, Rs 89 lakh as benefits and Rs 9.35 crore as commission.

Apart from this, RIL’s total payments towards the annual compensation for its top managerial positions for the year 2012-2013 also remained same at Rs 44 crore. This compensation was hiked from Rs 41 crore to Rs 44 crore in the preceding year. The top executives of RIL , namely Nikhil Meswani and Hital Meswani are paid 11 crore each. Other executives like PMS Prasad and P K Kapil will be given Rs 5 crore and Rs 2 crore as their annual remuneration for the current fiscal year.

Overall, the employee strength of RIL has increased in comparison to last year. So, the overall staff cost at consolidated level rose considerably to Rs 5,179 crore from Rs 3,955 crore in 2011-2012. The total number of employees rose from 23,166 to 23,519 in this current year. The company has recently hired 75 management graduates and 436 engineers from campus selection drives in the last fiscal and the numbers will rise in future.

Here, it has to be noted that RIL is coming up with its 4G services in India soon. The company will also expand its overall employee strength to take care of the future expansions in Reliance Retail and Reliance Jio Infocomm.

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KG-D6 Basins To Get A Boost Of $5 bn From RIL

May 10, 2013

Mukesh Ambani led Reliance Industries Limited (RIL ) is going to invest $5 billion for the development of the oil and gas fields in KG-D6 blocks located near Bay of Bengal.

This investment will be used by a series of projects that will cumulatively result in higher output of natural gas and oil from these basins. In the annual report of 2012-2013, MukeshAmbani said, “We are planning to invest in a series of projects to develop around 4 trillion cubic feet of discovered natural gas resources from the block.”

Along with their European partner BP Plc, RIL has agreed to governmental plans to bring to production satellite fields in the eastern offshore KG basin block to raise the output of the natural gas and oil production. “The field development plan for the R-Series project (in the KG-block) has been submitted to the Government of India for approval. This along with other projects is expected to add incremental production in the next four to five years.” he added.

Various activities like work-overs, side tracks and compressor addition have been taken up to accentuate the current rate of production. In the existing infrastructure, the search for new blocks has begun. The production from this new-found well will add to the overall result in the next four-five years.

RIL had originally discovered 18 gas fields in the area. From this, Dhirubhai-1 (D-1) and Dhirubhai-3 (D-3) are the highest productive blocks. Various base management actions like work overs, side tracks, compressor, enhancement of water handling capacity will be taken up to maintain and upscale the productivity of D-1, D-3 and MA fields. RIL said, “ The next wave of projects in KG-D6 block are envisaged to e undertaken over the next three to five years and entail potential total investment in excess of USD5 billion to develop around 4 trillion cubic feet of discovered natural gas resources.”

There are a series of projects in the pipeline for the next phase of oil and gas development one of which is satellite discoveries in KG-block. The company also plans to invest a huge amount in the block enhancement plans.

The vision of Mukesh Ambani behind this expansion plan is to make India completely import-independent. “We believe gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence.”Ambani said. The company also said that by the end of 2012, fields in KG-block had produced 2 TCF of gas and 22 million barrels that saved nearly USD 35 billion in energy imports.

Apart from this, the company also looks for new opportunities globally that strategically fit with its integrated value chain. RIL aspires to become one of global top ten independent hydrocarbon producers.

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