News: Will common interests harm the Ambanis?
(TNN 22/05/2006) Mumbai - The paths of Anil Ambani-controlled ADAG group and Mukesh Ambani’s Reliance Industries (RIL) seem to be intersecting more often. The overlap is especially visible in the energy sector, where both brothers are trying to tie up with the same partners for business.
One example is Anil Ambani’s plan to bid for the latest round of NELP (new exploration and licencing policy). RIL has traditionally been a very bullish player in NELP and had won its Krishna-Godavari blocks after aggressive bidding about four years ago. The company has ambitions of being a global player in the upstream oil and gas production business.
RIL chairman Mukesh Ambani has recently said that the exploration and production business has the potential to be RIL’s biggest business in the future. The company will begin full-year gas production from the Krishna-Godavari basin from the fiscal ending March 31, ‘10, after spending Rs 17,600 crore ($4.1bn) in the next few years.
For the Anil Ambani group, the interest in oil and gas is in the linkage to power production. ‘From well-head to wall-socket’ was the famous motto of Reliance Industries, before the two brothers parted ways.
The Anil Ambani group has huge interests in the power business and is obviously looking for a fuel source. However, NELP exploration could yield oil as well as gas. Both RIL and ADAG sources refused to comment on the issue.
Another area where both companies are actively interested is city gas distribution. RIL has already stated its intention to invest in setting up a world-class gas distribution network in eight major cluster hubs in states through which the gas pipeline evacuating its K-G basin gas will pass. According to the earlier agreement between the two brothers, city gas distribution in Mumbai and Delhi was supposed to be reserved for the Anil Ambani group.
In the financial services business, Anand Jain — a close business associate of the senior Ambani — recently garnered Rs 5,000 crore through a new realty fund. The financial services sector, catered to by Reliance Capital, was earlier thought to be Anil Ambani’s exclusive domain. The overlapping of business interests is apparent in a host of other businesses as both groups scramble to grab new opportunities.
Earlier, there was also a disagreement on the status of airport projects. The boards of the four Anil Dhirubhai Ambani group companies had in February identified deviations from the agreed position on the non-compete agreements. The previously agreed position was that the business relating to airports and airports infrastructure was exclusively reserved for Reliance-ADAG, without any exceptions.
However, the subsequent agreement with RIL, stated that RIL can enter the business of airports and airports infrastructure — which is claimed to be incidental/integral or necessary for any of its businesses, or, where ADAG has not been successful in privatisation of airports. The Supreme Court hearing on the airport privatisation case is scheduled for June 1, though the government has already handed over the Mumbai and Delhi airports to other private players.
One example is Anil Ambani’s plan to bid for the latest round of NELP (new exploration and licencing policy). RIL has traditionally been a very bullish player in NELP and had won its Krishna-Godavari blocks after aggressive bidding about four years ago. The company has ambitions of being a global player in the upstream oil and gas production business.
RIL chairman Mukesh Ambani has recently said that the exploration and production business has the potential to be RIL’s biggest business in the future. The company will begin full-year gas production from the Krishna-Godavari basin from the fiscal ending March 31, ‘10, after spending Rs 17,600 crore ($4.1bn) in the next few years.
For the Anil Ambani group, the interest in oil and gas is in the linkage to power production. ‘From well-head to wall-socket’ was the famous motto of Reliance Industries, before the two brothers parted ways.
The Anil Ambani group has huge interests in the power business and is obviously looking for a fuel source. However, NELP exploration could yield oil as well as gas. Both RIL and ADAG sources refused to comment on the issue.
Another area where both companies are actively interested is city gas distribution. RIL has already stated its intention to invest in setting up a world-class gas distribution network in eight major cluster hubs in states through which the gas pipeline evacuating its K-G basin gas will pass. According to the earlier agreement between the two brothers, city gas distribution in Mumbai and Delhi was supposed to be reserved for the Anil Ambani group.
In the financial services business, Anand Jain — a close business associate of the senior Ambani — recently garnered Rs 5,000 crore through a new realty fund. The financial services sector, catered to by Reliance Capital, was earlier thought to be Anil Ambani’s exclusive domain. The overlapping of business interests is apparent in a host of other businesses as both groups scramble to grab new opportunities.
Earlier, there was also a disagreement on the status of airport projects. The boards of the four Anil Dhirubhai Ambani group companies had in February identified deviations from the agreed position on the non-compete agreements. The previously agreed position was that the business relating to airports and airports infrastructure was exclusively reserved for Reliance-ADAG, without any exceptions.
However, the subsequent agreement with RIL, stated that RIL can enter the business of airports and airports infrastructure — which is claimed to be incidental/integral or necessary for any of its businesses, or, where ADAG has not been successful in privatisation of airports. The Supreme Court hearing on the airport privatisation case is scheduled for June 1, though the government has already handed over the Mumbai and Delhi airports to other private players.
posted by InCar Group Press Room at 10:32
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