After hiving off its non-core businesses of telecommunications, power and financial services, Mukesh Ambani-led Reliance Industries Limited (RIL) has decided to focus on its core business of refinery and petrochemicals, setting aside a war chest of over Rs 58,500 crore ($13 billion) for investments in these key businesses. Of this, a total sum of Rs 9,476 crore would be invested in the core businesses in the current fiscal itself. Apart from a massive investment of Rs 27,000 crore ($6 billion) for the Jamnagar Export Refinery Project (JERP), RIL will invest Rs 20,250 crore ($4.5 billion) in the exploration and production (E&P) sector, Rs 7,200 crore ($1.6 billion) in enhancing petrochemical capacities and another Rs 6,750 crore ($1.5 billion) in the creation of a fuel retailing network.
Confirming the development, a source close to Mukesh Ambani told FE , "We have allocated Rs 20,250 crore capital to the higher potential, higher margin E&P business. In the next five years, we aim to reach what the company had achieved over the last three decades." For the current fiscal, RIL has set aside Rs 9,476 crore for capital expenditure (about 71% of its cash profit). For 2006-07, it plans to spend Rs 2,198 crore on E&P, Rs 2,692 crore on refining, Rs 850 crore on retail marketing, Rs 2,921 crore on petrochemicals and Rs 878 crore on other projects. While the RIL chairman may be experimenting with new businesses like retail, life sciences, agriculture, dairy and real estate, his key focus would continue to be in refining and petrochemicals.