Reliance might sell U.S. shale assets if the prices remain depressed

Dices cubes with the words SELL BUY
Source: DollarPhotoClub

Mumbai-based Reliance Industries Ltd, which operates the world’s largest oil refinery, and which had invested over $8 billion in gas joint ventures in the U.S. by March-end, is contemplating the sale of the company’s investments in shale gas in the United States due to falling prices – a source close to the company said.

The company hasn’t made a final decision to sell, and – according to another anonymous source – Reliance isn’t willing to part with the assets at a depressed price, but if the sale is decided it will be the second divestiture of assets this month after Reliance, along with partner Pioneer Natural Resources, sold a pipeline in Texas for $2.15 billion.

Reliance owns 45 percent stake in a project owned by Pioneer Natural Resources in Texas, and 40 of a venture controlled by Chevron Corp. in Pennsylvania. It jointly owns another project along with Carrizo Oil & Gas Inc., also in Pennsylvania. It also produces gas in India, from the KG-D6 basin, in partnership with BP Plc.

If the company does decide to sell the holdings, it will be as a part of a strategic review of its assets, as it believes their worth isn’t fully reflected in its market value – an anonymous source told Bloomberg.

“If you are not a big player in upstream, then it makes sense for you to divest from those resources,” Abhishek Kumar, a London-based senior analyst at Interfax Energy’s Global Gas Analytics, told Bloomberg.

“From the longer-term perspective, it’s possible that Reliance expects prices of oil and natural gas liquids to remain low, which can be a reason for them to consider a sale of the shale assets.”

Article continues below this message

Have your opinion heard with Shale Gas International

We accept interesting, well-written opinion and analysis articles of up to 1,500 words, that offer unique insights into the shale industry. The articles cannot be overtly promotional in nature and need to fit into at least one of our content categories.

If accepted, the article must be exclusive to Shale Gas International website and cannot appear on any other websites, publications, etc. Each article may contain up to three links to external websites relevant to the content discussed in the piece.

If you would like to contribute to Shale Gas International website, please contact us at: editor[at]