Rumor has it that India’s energy exploration giant, Reliance Industries Ltd. is seeking to partner with Oklahoma-based Chesapeake Energy Corp., the third largest natural gas producer in the United States. Chesapeake owns roughly 600,000 acres in south Texas’ Eagle Ford shale formation where Reliance spent 1.3 billion earlier this year to acquire a portion of Pioneer Natural Resources Company.
Based in Mumbai, Reliance is India’s largest company, when measured by market value. Unnamed sources report that Mukesh Ambani, billionaire controller of Reliance, seeks a joint venture with Chesapeake along with BP Plc and Royal Dutch Shell Plc. Mukesh Ambani told shareholders earlier this year that Reliance desired a significant stake in the shale gas market. Gas is produced from shale when a process by which the rock is heated to extract the gas is employed. Manoj Warrior, a Reliance Industries spokesman declined comment on the billionaire’s next move, dismissing the chatter as speculation. Spokesman for Chesapeake, Jim Gipson also remains silent on the Reliance Industries matter.
Reliance Industries has snapped up over three billion dollars of shale gas assets in the US since early 2010. In September the company’s shares surged 2.7 percent on the Indian market after a six percent decline earlier in the year. Chesapeake’s stock has dropped sixteen percent in 2010. Chesapeake’s chief financial officer, Marcus Rowland reports on their website that the billionaire company is planning an international joint venture for Eagle Ford assets.
Chinese company, Cnooc Ltd. has already committed $1.08 billion for a one-third share of Chesapeake in mid-October. Other high profile billionaire investors, such as Carl Icahn continue to invest in Chesapeake as the company accelerates drilling and pays off old debts with the proceeds. Analysts currently tout natural gas as a “clear bet” for investors over the coming years.
Mukesh Ambani’s Reliance Industries has been identified and awarded amongst Asia’s most progressive and ethical companies for its strong culture of corporate social responsibility. As chairman of Reliance, Mukesh Ambani has propelled Reliance to the position of most valued Indian company with about two percent of the world’s fuel holdings. Thanks to Ambani, India currently boasts the largest fuel refining entity in the world. According to Ambani, Reliance went public in 1979 after being founded in 1960 as a private firm. His claim of starting the company with one-thousand US dollars lends credibility to his mission of creating an acceptable living standard for the people of India.