RIL to divest in oil and gas arm abroad

Reliance Industries Ltd (RIL) will induct a strategic partner in its overseas oil and gas projects which are being spun off into a new entity.

Sources familiar with the development said RIL is to divest 20 to 25 per cent in the Dubai-based Reliance Exploration and Production DMCC, the holding company for RIL's foreign oil and gas projects.

Global energy major Chevron Corporation, which has equity interest in RIL's subsidiary Reliance Petroleum, might be the preferred partner for Reliance Exploration, they added. An RIL spokesperson declined to comment.

Reliance Exploration will house RIL's interest in a discovered oil block in Yemen and an offshore exploration block in Oman and exploration projects in northern Iraq, East Timor and Columbia.

RIL is keen to acquire gas fields in central and West Asia.

Sources said the proposed divestment will strengthen Reliance Exploration in terms of pooling expertise and improving overseas bidding prospects.

RIL has had a track record of divesting stakes in its subsidiaries. For instance, Chevron Corporation acquired 5 per cent in Reliance Petroleum for $300 million last year, with the right to scale up its holding by another 24 per cent.

RIL had also formed an equal joint venture with Bechtel last year for third-party engineering contracts.

The move to divest equity in Reliance Exploration is part of a restructuring exercise that began last year.

A year ago, RIL brought a handful of subsidiaries under Indian Petrochemicals Corporation (IPCL), a group company that is in the process of being merged with it. A fortnight ago, Chairman Mukesh Ambani also committed Rs 16,000 crore for RIL.