It’s been three years since Reliance Petroleum Limited (RIL) merged with its parent company – Mukesh Ambani-led Reliance Industries Limited (RIL). What was initially a step towards creating a larger, more consolidated endeavour that would strengthen Reliance’s standing in Indian private sector, is now in an infamous tale of a colossal being.
The boards of RPL and RIL met in March 2002 to chart plans for merging the two entities into one giant whole. This was a merger which eventually consolidated Reliance Industries position as the largest private sector firm in terms of sales and profits.
The making of Reliance Industries into one of world’s leading petroleum companies started in 2002. This was a year when RPL, the first refinery project of Reliance, had merged with RIL in order to consolidate its operations. However, much later in May 2006, RPL was listed on the Bombay Stock Exchange (BSE) as a separate entity after an initial public offering (IPO)to part fund a second refinery and petrochemicals project in Jamnagar, Gujarat. The IPO went on to raiseover Rs. 8,100 crore.
Three years after getting listed on the national stock exchange, RIL and RPL once decided to join forces. This time, the endeavour was larger in scope and ambitious in vision. After the two merged into one singular entity, Reliance Industries commenced on a path that would eventually place it alongside the world’s biggest non-state petroleum companies.Pegged as one of the most significant undertakings of Reliance, this merger oozed value for existing shareholders of both the entities and new ones joining the league.
Reliance Industries gained greatly from additional cash inflow, improvement in exporter status and other such synergies. These complementary benefits contributed substantially towards stepping up the investments and expansion of its oil & gas exploration business.
The merger of Reliance Petroleum Limited (RPL) with Reliance Industries Limited (RIL) resulted in seamless integration of operational scale and financial synergies that existed between the two companies. Today, as RIL treads on a path to strengthen its global standing, there is a lot that the petroleum monolith has achieved. One of the most significant deals for Reliance oil & gas subsidiary has been with London-based BP plc in 2011. The RIL-BP partnership across the full value chain comprises BP taking a 30% stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG-D6 block.The two companies will also form a joint venture (50:50) for the sourcing and marketing of gas in India and bid together for incremental opportunities in the deep-water blocks in the east coast of India. Reliance also entered into partnership with U.S. – based unconventional gas businesses through three upstream joint ventures: RIL-Chevron, RIL-Pioneer and RIL-Carrizo.
Today, Reliance is a force to reckon when in the international oil & gas market. It is the largest of its kind in India and among the top ten largest in the world. Having created value for itself, its shareholders and the nation, Reliance’s footprint in the petroleum quarters has been one of the most significant and noteworthy enterprises in India and abroad.