Mumbai: Reliance Industries, India's most valuable company, on Friday announced multi-billion dollar investment plans in the power sector and said that it will supply natural gas to Anil Ambani Group's power plants as and when they are ready.
RIL Chairman and Managing Director Mukesh Ambani said the company was ready for a "big surge forward" and will use its strong finances for "inorganic" growth and new ventures including expansion of capacity to produce polyester.
Addressing company shareholders exactly five years to the day when he and his brother Anil split the Reliance empire created by their father Dhirubhai Ambani, Mukesh signalled his desire to end the feud with his younger sibling Anil.
"With legal dispute (over supply and pricing of natural gas from RIL's Krishna Godavari basin fields to Anil Ambani Group's power plants) behind us, we look forward to a harmonious and constructive relationship with Anil Dhirubhai Ambani Group (ADAG)," he said at the meeting, which contrary to speculation was not attended by Anil Ambani.
RIL, he said, was ready to supply gas to ADAG's power plants including the proposed 7,800 MW at Dadri near Delhi, as and when they are ready to receive the fuel. The supplies would, however, be subject to the government allocating gas to ADAG plants like it has done for all of the over 60 million cubic meters per day of output from KG-D6 fields.
"As and when the power plants of ADAG are ready to receive gas, we would commence supplies to them subject to government granting allocation...," he said.
Within weeks of the decision by the world's richest siblings to scrap a 2006 accord that barred them from expanding into each other's businesses, RIL said it has planned "mega investment" in thermal, hydel and nuclear power generation.
The company has already forayed into telecom sector, which along with power, was hitherto the reserve of Anil Ambani under the 2006 non-compete accord.
"We are ready to bring into full play our investment mobilisation capabilities, as well as our superior project execution capabilities, into a sector that is crying out for transformational mega initiatives," he said.
While Ambani did not put a figure to the investment, sources in know said RIL may be planning USD 10 billion spending, including on bidding for the government's planned ultra mega power projects in Orissa and Chhattisgarh.
"We are drawing up specific plans for mega investments in this (power) sector with clean coal-based power generation projects, hydel projects and also in nuclear power as and when it is opened up," he said.
Mukesh and Anil fought a bitter battle over gas supplies from KG-D6 both in and outside the courts where the younger Ambani claimed fuel as per terms decided in 2005 family agreement that split the Reliance empire between them.
RIL opposed such supplies saying government alone had the right to price the fuel and fix its users.
"The Supreme Court upheld, in most parts, the stand of RIL. It has always been our position that we are, and continue to be, governed by the provisions of the Production Sharing Contract (PSC) in all respect of the petroleum operations carried out by us.
"We have also been fully conscious that the Government of India has more than a significant say in these operations," Mukesh said at RIL's Annual General Meeting (AGM) here.
Earlier, dressed in his trademark black business suit with a white shirt, Mukesh arrived at Birla Matoshree in his black Merc along with his wife Nita and mother Kokilaben. Anil, who was rumoured to be making an appearance at the AGM, was absent.
"For Reliance, power business is a natural and synergistic extension of its energy portfolio," he said announcing the "game-changing" development of RIL and ADAG annulling the earlier non-compete agreement and replacing it with a new one.
"This new agreement opens up the full range of power business for RIL, except non-captive gas-based power plants until 2022. This paves the way for Reliance to participate in the whole value chain of power business, spanning generation, transmission and distribution," he said. "We see and unbounded opportunity in this space."
Sources said RIL may be planning 20,000-30,000 MW of power plants over next five years.
Under an agreement reached exactly five years ago, Mukesh, 53, kept the petrochemicals, oil and gas units and Anil, 51, got the power, telecommunications, financial services and entertainment units.
After scrapping of the 2006 non-compete agreement, RIL on June 11 acquired an Internet services company for USD one billion.
As reconciliatory move, Anil withdrew a Rs 10,000-crore defamation suit he filed in 2008 against Mukesh in the Bombay High Court. The brothers and their families are also said to have holidayed in South Africa's Kruger National Park last week.
RIL, operator of the world's biggest refining complex and India's largest natural gas field, had cash equivalent of more that Rs 21,874 crore, Ambani told company shareholders. PTI