Reliance to Foray Into Upstream Oil and Space, Next Year, In Venezuela
Filed Under: Business | Posted: 11/26/2012 at 3:45AM
Comments | Region: India
There are chances RIL may soon expand and bolster its growth by entering Venezuela’s oil and gas upstream space. Sources claim that the company has been understanding prospects and will soon set the balls rolling. At present, they do not cater to exploration acreages and entail to the development and production of assets, only.
Considering the fact that it is mandatory for a company to acquire participating interest to involve in the Oil and the Gas Upstream business, RIL has been taking steps to acquire participating interests in the previously discovered areas. The advantage RIL received as it received participating interests in the previously developed fields at a premium enabled it to acquire a number of exploration acreage. The Venezuelan acquisition will surely give more teeth to the company’s expansion.
At present, Reliance Exploration & Production DMCC, an arm of Mukesh Ambani led RIL, has seven Oil & Gas blocks, overseas including two in Yemen, two in Peru, one in Australia and two in Columbia other than its shale gas assets in the USA. Due to political and geographical interruptions, the company relinquished blocks in East Timor (one), Oman (one), Kurdistan (two) and Yemen (One).
The company has earlier inked a Memorandum of Understanding (MoU) with Petroleos de Venezuela, Venezuela’s State Oil Company to augment the heavy oil fields over there. The MoU corroborates the fact that RIL will explore upstream options in heavy oil projects of the Orinoco oil belt on a joint basis.
Venezuela was in talks earlier with Reliance Indus with respect to exploration of its blocks- Ayacucho and Boyacá fields according to Fadi Kabboul, Executive Director, and Corporate Planning of PDVSA. There were news of RIL expressing interest in Boyacá 4 block and an individual section in the Ayacucho area of the Orinoco belt with the production capacity of 2,00,000 barrels per day each.
It had always shared an amiable relationship with Venezuela to buy more crude oil, increase the quantity from 150,000 bpd of oil to 270,000 bpd. The South American country ensured selling between 300,000 bpd and 400,000 bpd of oil, based on this agreement. RIL has been buying crude oil from Venezuela for its Jamnagar refinery with the 62 million tonne per capacity. Its refinery has been proficient to process crude obtained from Venezuelean, which is relatively cheaper.