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Reliance to double refining capacity

Special Correspondent

Project will be completed in 2008-09



NEW GROWTH AVENUES: The Chairman and Managing Director of Reliance Industries, Mukesh Ambani, addressing the annual meeting in Mumbai on Wednesday. — Photo: Paul Noronha

MUMBAI: Reliance Industries Limited (RIL) will double its petroleum refining capacity at Jamnagar to 60 million tonnes annually.

"The expansion will entail an investment of Rs. 25,000 crore and will make the refinery the largest petroleum refinery at any single station in the world. It will result in 1.2 million barrels a day of crude throughput,'' said Mukesh Ambani, Chairman of RIL, while addressing the company's 31st annual general meeting here on Wednesday. The increased output was primarily aimed at export markets, he added.

For completion of the project, RIL has set for itself an aggressive schedule for the second half of 2008-09. The full benefit of the new capacity will be available from 2009-10.

More discoveries planned

Mr. Ambani has completed three years as Chairman of RIL. He succeeded his father Dhirubhai Ambani as Chairman on July 2, 2002. The market capitalisation of RIL was around Rs. 34,000 crore at that time. Today it is over Rs. 100,000 crore. "This is my humble tribute to my father,'' said Mr. Ambani.

In the exploration and production (E&P) sector, Mr. Ambani said RIL made ten more oil and gas discoveries since the last AGM. These included three more discoveries in NEC 25, six more in KG D6 and one more in Yemen. The discoveries in NEC 25 and KG D6 had been named Dhirubhai 15, 16, 17, 18, 19, 20, 21, 22 and 23, in the memory of the late Dhirubhai H. Ambani, founder of Reliance. "I look forward to the day when we will have a Dhirubhai 100 discovery. And that will be the day to celebrate,'' he added.

Initiative in life sciences

He said the company's next major initiative would be in life sciences, and this would eventually lead to the larger world of health care. Globally, health care is a $4.5 trillion market driven by rising unmet medical needs.

To attain these objectives, RIL would pursue the organic growth strategy of scaling up existing resources, and the inorganic route of acquisition of businesses and assets.

Mr. Ambani said RIL's financial strength would enable it to pursue expansion and new growth avenues with a small leverage on debt.

In the next four to five years, investments in upstream oil and gas exploration and production will take up Rs. 17,600 crore. RIL's cash flow over the next few years will be largely funnelled to expansion of its core strength in oil and gas, petroleum refining and petrochemicals businesses. It will be used for opening up new areas of growth."Substantial investments in core businesses will enable RIL to accelerate the earnings growth momentum of the past decade, and will add to shareholder wealth."

Mr. Ambani said the board of RIL had proposed to de-merge from RIL the power, financial services and telecommunications services businesses. RIL's holdings and interests in these businesses would be de-merged into separate entities. RIL shareholders would be entitled to equity shares in these entities in the same proportion to their equity holdings in RIL.

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