RIL To Spin Off Oil, Gas Business

Mumbai: Reliance Industries (RIL) is planning to hive off the drilling and exploration operations of its oil and gas business. According to the source, the new entity would remain a subsidiary of RIL, which might dilute its holding to raise funds for the new company. Sources said a new company would make the RIL balance sheet immune to the huge requirements of capital to finance the logistics operations of the oil and gas business. Exploration and drilling for oil and gas requires technical proficiency, as well as huge capital. The new entity will join the group of two other RIL?s subsidiaries ? Reliance Petroleum and Reliance Retail. Reliance allows its subsidiaries to finance their operations through their own resources without leveraging its balance sheet. Chairman Mukesh Ambani and his associates had last week committed to shell out over Rs 16,000 crore to scale up their holdings by 4 per cent to 55 per cent.