RIL May Bid to Buy Stake in Haldia Petrochemicals Limited

Reliance Industries Limited (RIL) plans to bid for 31 percent stake ownership in beleaguered Haldia Petrochemicals Limited (HPL). The West Bengal government has decided to sell away its stake of 31 percent in HPL. Earlier the government had announced for the companies to submit their expression of interest to buy this stake. RIL had already submitted its expression of interest for the stake and will now bid its price in the month of September.

Currently, there is a legal battle going on between The Chatterjee Group (TCG), a joint promoter of HPL and the state government over the control of the company. Until legal battle reaches a conclusion, the Calcutta High Court has permitted the state government to sell the un-disputed stake of 31 percent.

For Mukesh Ambani led RIL, a stake in HPL plant will be beneficial. The plant is located near Kolkata and has a production capacity of about 65 percent of its total installed capacity. Apart from this, RIL produces naphtha- the feedstock used to produce valuable chemical compounds. The energy giant will be able to supply naptha from its Jamnagar refinery to this HPL plant and cater to the demand for petrochemicals in the eastern region.

In addition to this, RIL is also vying to purchase 30 offshore oil and gas blocks in Myanmar. According to Myanmar’s Energy Ministry, 11 shallow water and 19 deepwater blocks have been put up for international and national companies to bid. Last month, the shortlisted firms had been called to view data on these blocks. Reliance has viewed the data on the blocks on July 25. Data viewing will continue till the first week of August 2013. The Myanmar government will start awarding the acreage in the early half of 2014. The notice from the Myanmar Energy ministry said that for shallow water blocks, the qualified bidding companies will have to partner with at least one Myanmar owned company, while the bidders can invest directly for the deepwater blocks.

At the last Annual General Meeting, Mukesh Ambani had announced that there will be major focus on the expansion of its core businesses which comprise of oil, gas, refining and petrochemicals sectors. About 82 percent of the total investment of 1.5 lakh crore will be used in these sectors. RIL is gaining good ground in its US Shale gas business too. RIL is looking forward to an upsurge of its stake in the domestic as well as the international energy market for the next three years.



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