The returns from Reliance Industries’ domestic oil and gas exploration business are still lower than the cost of capital invested, Mukesh Ambani, Chairman, RIL, said at the company’s annual general meeting here on Friday.

“The contribution of the exploration and production business under NELP (the new exploration licensing policy) to earnings before interest and taxes (EBIT) is ₹194 crore, which is about 0.6 per cent of the company’s EBIT,” he said.

RIL has been involved in a long drawn-out tussle with the government over the KG-D6 gas basin. In his speech, Ambani said, “We are constructively engaged with the government to resolve legacy issues in a timely manner with regard to our rights to cost recovery, gas pricing and other issues to create value for the nation and our shareholders.”

New facilities

Ambani said that RIL has invested about ₹2 lakh crore (including projects in the pipeline) to build new facilities and new businesses, which will come into fruition in the next 12-18 months.

For the refining and marketing business, Reliance intends to re-commission its entire network of petroleum retail outlets by the end of FY-16. The Jamnagar factory is also implementing a coke gasification facility, which will convert low-value petroleum coke to a clean energy source for the refinery complex.

Significant capital has also been invested in RIL’s primary petrochemicals business, including a 1.5-million-tonne ethylene cracker at Jamnagar.

Ambani said the facility is being built at a significantly lower capital cost than its peers in North America.

Ambani said that the full benefits of the company’s varied investments, primarily in its petrochemicals and telecom businesses, will be realised from 2016-17 onwards.

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