Reliance Industries ltd. (RIL) has signed a memorandum of understanding (MoU) with Mexico’ state-owned oil company Petroleos Mexicanos (PEMEX). Reliance industries stated the facts in a press release titled, ‘Reliance signs MoU with Petroleos Mexicanos (PEMEX)’ dated 5th December, 2014 which was given to Bombay stock exchange (BSE).
PEMEX CEO, Emilio Lozoya and Reliance Executive Director, PMS Prasad signed the deal.
The particulars of the pact
Under this pact, Reliance Industries will co-operate with the Mexican company for assessment of potential upstream oil and gas business opportunities in Mexico.
Reliance Industries want to expand their growth in the international markets to create a competitive edge for themselves. The company is hopeful of leveraging its organizational skills and create value for exploration and production for a longer period of time.
The release states, “RIL’s cooperation with PEMEX is in line with its growth strategy to explore opportunities and to expand its international asset base in regimes having internationally attractive competitive terms.”
The two companies will exchange their experiences and technologies with each other in the hydrocarbon sector. They will explore the added opportunities in varied streams of the hydrocarbons chain together. The streams range from exploration, to production, to refining and processing. Reliance will provide technical support for refining value maximisation.
PEMEX and Reliance industries, both controlled by Mukesh Ambani, will also devise environmental strategies to enable sustainable activities. They will promote social responsibility through their schemes.
The two companies will share their skills and information in the relevant areas of oil and gas industry. This includes deep-water oil and gas exploration and production.
Reliance Industries have been a pioneer in deepwater development and gave the best practises in the East Coast of India. Through the MoU, Reliance will share its proficiency. Along with this, it will also share its knowledge and experience in shale gas in United States of America.
The signing of the deal will further strengthen the long standing relationship between Reliance and PEMEX.
Mexico’s energy aspirations
Mexico, world’s tenth largest oil crude producer, is reforming its energy sector. It wants to attain $50 billion investment by 2018 to stem long-sliding crude production. It is gearing itself to open up its oil sector with the first bidding round in the coming year.
This is why PEMEX has been signing a lot of cooperation pacts. It is seeking more cooperation with India. It has said that it predicts India and China to bethe future growth markets for crude. Therefore, it had also signed a similar deal with the overseas arm of India’s state-run company, Oil and Natural Gas Corp.
Impact of the deal on market
The share prices of Reliance Industries went up by 0.56 percent. At 11:51 a.m., Reliance Industries’ shares were priced at Rs. 963.90 which is an increase of Rs.5.35. At 10:48 a.m., Nifty was also up by 0.12 percent.