RIL To Continue Investing In Venezuela
Filed Under: Business | Posted: 01/22/2013 at 5:50AM
Comments | Region: India
President Hugo Chavez’s deteriorating health condition does not deter Mukesh Ambani, India’s most powerful business magnate and the Chairman and Managing Director of RIL (Reliance Industries Limited), from investing there. The company plans to infuse an investment of over $ 2 billion in Venezuelan oil fields. Sources who have confirmed the news claim Mukesh Ambani believes that the health condition of the president will not pave way for any political mayhem eliminating the chances of it affecting the businesses there.
The conglomerate yesterday reported an overall increase in its net profit for the third quarter year on year to Rs. 5,502 crore. By an increase of 10.1% year on year, its turnover has also climbed to Rs. 96,307 crore wherein the revenue of petrochemical sector posted an increase of 11.5%. The petroleum sector has been a stimulus to this overall profitability. RIL’s earnings have mounted to $9.6 for every barrel of crude this year as compared to $6.8 a year earlier. While the company is rejoicing at this success, it is not leaving any stones unturned to accelerate this growth further. Diesel deregulation could also act as another contributing factor to its success, if enforced.
Along with state run company Petróleos de Venezuela (PDVSA), the company has been probing into the commerciality of its four investments in four oilfields. Based on the results of this study, it will carry out further activities. Having the largest oil reserves capable of producing cheaper and heavier grades of oil, Venezuela has been a preferred destination for Reliance Industries as it complies with the need to process at two adjacent refineries.
Chavez who is a third time president, re- elected in October was diagnosed with Cancer. While he headed to Havana for a fourth surgery on December 10th, nothing is known about him since then. Piorre Noel from The International Institute for Strategic Studies at the economic and energy security domain ensured that there is no need to panic, as the government policy will continue to remain the same unless there is a change in the regime. He also mentioned that Chavez has always been always in favor of oil trading with foreign countries especially Asian.
Processing heavier grade of Venezuelan crude has enabled the company to increase its margins at its refineries. The company has been banking on countries like Venezuela for heavy crude oil supplies as Middle East countries exploit their supplies for their own needs.