Mumbai, Mukesh Ambani, chairman of Reliance Industries Limited, Indias most valuable private sector corporate, confirmed that the long term association with various US based companies to tap the Shale gas sector will be beneficial for the growth of RIL. Reliance Industries Limited announced that it is planning to have a joint venture with the US-based Pioneer Natural Resources Company of Irving. According to the reports, Reliance Industries Limited is going for this deal with its subsidiary Reliance Eagleford Upstream LP and under this, RIL will acquire 45 per cent in Pioneers core Eagleford Shale acreage position. As per the reports, following the transactions, all three companies, Pioneer, Reliance and Newpek will own 46%, 45% and 9% interests respectively. However the share price of Reliance Industries Limited fell to 0.7% as the investors are not happy with this deal to acquire Shale gas from US.

According to Deven Choksey, MD, KR Choksey Securities, RILs decision to buy 45 % stake in Pioneer Natural Resources, will help the company grow in terms of assets. He also feels that the deal will lead to the value appreciation of 20-22 per cent per share of RIL. The joint venture may also lead to increased current drilling program to approximately 140 wells per year within a short span of three years. As per the sources at Reliance Industries Limited, Pioneer Natural Resources Company of Irving will work as the development operator for this joint venture whereas Reliance Industries Limited will begin as the development operators in the years to come.

Reports reveal that Reliance Eagleford Midstream LLS, Reliances subsidiary will pay $46 million to acquire a share of 49.9 per cent. Under this agreement both the companies, Pioneer Natural Resources Company of Irving and Reliance Industries Limited will have equal governing rights, however the operator will be the Pioneer Natural. Speaking about this joint venture by RIL, Executive Director, Reliance Industries, Mr. PMS Prasad said, Reliance is very pleased to establish a long-term partnership with Pioneer in the Eagle Ford shale. This transaction represents another significant milestone in Reliances efforts to grow its North American shale gas operations.

Addressing shareholders at the companys annual general meeting, Mukesh Ambani talked about the future plans related to Shale gas expansion and said, Reliance aspires to build a significant position in the shale gas business. During the year, we will continue to pursue such joint development opportunities with the best operators as well as on our own to build a substantial upstream business in North America.

Notes to Editor

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is Indias largest private sector enterprise, with businesses in the energy and materials value chain. Groups annual revenues are in excess of US$ 44 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India.