Indian billionaire Mukesh Ambani’s Reliance Industries Ltd. is weighing a sale of its U.S. shale gas investments, people with knowledge of the matter said.
The Mumbai-based company may sell the holdings as part of a strategic review of its assets, as it believes their worth isn’t fully reflected in its market value, one of the people said, asking not to be named as the details are private. It has invested more than $8 billion in its unconventional gas joint ventures through the end of March, according to its annual earnings report.
Reliance, the operator of the world’s biggest oil-refinery complex, said July 24 that earnings from its shale assets fell in the latest quarter as natural gas prices slumped. Hydraulic fracturing has opened up reserves from Texas to North Dakota, causing prices to fall 54 percent from the five-year high reached in 2014.
Selling the shale assets would allow Reliance to put its capital to more productive uses, given the gas market may not improve for some years, according to one of the people. It hasn’t made a final decision to sell, and Reliance isn’t willing to part with the assets at a depressed price, another person said.
BHP Billiton Ltd. wrote down an additional $2.8 billion on its shale assets this month, joining impairments by explorers Royal Dutch Shell Plc, Statoil ASA and Total SA. Tushar Pania, a spokesman for Reliance, didn’t reply to an e-mail seeking comment.
Reliance, which has a market value of $51 billion, owns 45 percent of a project controlled by Pioneer Natural Resources Co. in south Texas’s Eagle Ford formation. It also has a 40 percent interest in a Chevron Corp. venture in the Marcellus shale deposit in Pennsylvania, as well as 60 percent of a project in the same area jointly owned with Carrizo Oil & Gas Inc.
The Indian company and partner Pioneer Natural Resources this month sold a Texas pipeline and processing company to Enterprise Products Partners LP for $2.15 billion.
Recommended Reading
Oxy Nears $4.5B Debt Reduction Target Post Barilla Draw Sale
2024-08-19 - Occidental Petroleum, which paid $12 billion to acquire CrownRock LP, looks to achieve 85% of its near-term debt reduction target of $4.5 billion by the end of the third quarter 2024, says Oxy CEO Vicki Hollub.
Martin Resource Sidesteps Firms’ Criticism, Offer for Midstream MLP
2024-07-11 - Martin Resource Management, which in May proposed buying spinoff Martin Midstream Partners, responded to two capital firms’ counteroffer made public July 11 by saying it’s not interested.
EQT Closes $5.45B Acquisition of Equitrans Midstream
2024-07-22 - In addition to integrating Equistrans’ midstream assets, EQT will focus on reducing the infrastructure company’s debt of between $7.6 billion and $8 billion. Including equity and debt, the deal is valued at roughly $13 billion.
‘Knife Fight’ for NGLs Driving Midstream Mergers in 2024
2024-09-05 - The latest acquisitions in the midstream sector are focusing on natural gas gathering and processing to secure a spot in the lucrative NGL market.
D-J’s Elevation Midstream, ARB Midstream Subsidiary to Merge
2024-07-08 - Elevation Midstream and Platte River Holdings, a subsidiary of ARB Midstream, are merging to create a D-J Basin midstream company of scale.