Reliance Industries Ltd., largely owned and controlled by Billionaire Mukesh Ambani has a complex refining operation and the largest private sector business in India. Reliance Industries now obtains about 300,000 barrels a day, from South America. This amounts to 25{3291cb1bf4fd73bca8d404e832e186cbc6f97ddc4c21a45f51320a1dbbde3932} of its crude oil purchases. Two thirds of that oil comes from Venezuela. Reliance Industries Ltd. Since January Mukesh Ambani and Reliance Industries has been procuring approximately 200,000 barrels of oil a day from Venezuela.
This is good news for Venezuela’s President Hugo Chavez who has consistently resisted being overly dependent on North America. Chavez strongly desires more trade with Asia, while distancing himself from the U.S. markets. Chavez has even expressed fears that the United States would attack his country and take their oil reserves by force. This is certainly a commentary on how other nations view U.S. actions in the gulf. Though Venezuela currently ships about one million barrels of crude a day to U.S. refineries, it is apparently not without trepidation. Mukesh Ambani had no problems in striking a deal for more oil from Venezuela.
Richard Gorry, director of energy consultants JBC Asia Pte Ltd. recently stated, “Buying crude from South America is something we are going to see more and more in the future, because it has relatively good value if you have the right refining set up.” Reliance Industries plants turn low- quality heavy crude oil, such as the type produced in Venezuela into gasoline and diesel, which he exports to other parts of the world.
Global demand for oil in 2010 has been approximately 87.8 million barrels a day. That is a 3.8 percent increase from 2009, despite efforts in many nations to cut fuel consumption and go green. While green energy is offsetting the growing demand for oil, many developing countries have an increased need for it, due to growing industrial development.
Billionaire Mukesh Ambani, who owns 48{3291cb1bf4fd73bca8d404e832e186cbc6f97ddc4c21a45f51320a1dbbde3932} of Reliance Industries stock and is the chairman and managing director, has set up Reliance Industries refineries to process the heavy crude because it is cheaper. Heavy crude costs about 8 dollars a barrel less than other types. Heavy crude is found mainly in Iran, South America and Sub-Saharan Africa. With United Nations sanctions against Iran for failure to curtail its nuclear program, the only remaining sources are South America and Africa. Mukesh Ambini believes it is well worth the cost of shipping. The cost per barrel for shipping, works out to about $2.00, which still grants an overall savings of $6.00 a barrel.
Mukesh Ambani is currently the fourth richest billionaire in the world with a personal wealth of $29 Billion. Mukesh Ambani inherited Reliance Industries from his father Dhirubhia Ambani, and until the 1970’s the family lived simply in a two bedroom apartment. Today billionaire Mukesh Ambani and his family live in the worlds most expensive private residence called Antilia. The building is 27 stories and valued at approximately $500 – $700 million. Reliance Industries is involved in communications technology, textiles, polyester fibers, petrochemicals, petroleum refining and oil and gas exploration and production.
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