Stages Of The History Of The Reliance Group

Published Date: 02 Nov 2017

Introduction 4

1. Exxon Mobil 5

2. Shell 6

Reliance-A case study: 8

Main stages of the history of the Reliance group: 8

Objectives of the study: 11

Research Methodology 11

Secondary data collection 11

Literature review 12

The value chain of the oil and gas: 12

Crude oil value chain 12

Natural Gas Value Chain 13

Various activities that can be successfully integrated oil and gas industry, Royal Dutch Shell 13

Shell 13

Business activities 14

Integrated oil and gas 14 Business

Upstream International 14

Upstream Americas 15

Downstream 15

Projects and technology 15

Effects of vertical integration (Benefits) 15

The impact of the merger on the activities of Exxon and Mobil in 1999: 17

United States 17

Canada 18

Europe 18

Asia-Pacific 19

20 other countries

Global Exploration, 22

Effects of vertical integration (demerits): 22

Fluctuating prices of crude oil, natural gas, petroleum products and chemicals. 23

Competitive forces: 23

Future production of hydrocarbons 23

The erosion of 24 cases Reputation

The development and deployment of new technologies 24

Increasing environmental concerns 25

Risks Safety, Security and Environment 25.

The self-insurance risk exposures 26

Business and operating environment in Nigeria 26

Present in over 70 countries, with varying degrees of political stability, legal and tax 26

Exposure to social instability, terrorism, acts of war, sanctions, piracy and Government 27

Relying heavily on systems of Information Technology 27

Estimates of proved reserves of oil and gas 27

Joint ventures or associates reduce the degree of control and ability to identify and manage risks 28

Effects of vertical integration on Reliance Industries Limited: 29

Implementation of RIL Jamnagar Refinery 31

Reliance decomposition sales (excluding exports RLP) in 2000-01 32

Recent Developments: 33

Conclusion and Recommendations: 36

Reference: 37

Introduction

The word e vertical integration describes a style of management control. The oil industry has always been a fertile ground for analysis of the reasons and the effects intégrationverticale. One reason for this popularity that production steps are easily differentiated. The general perception is that integration is a sine qua non for the success of the company as the oil industry is populated by large integrated companies making profits "excessive".

Vertically integrated companies in a supply chain are united through a common owner. Vertical integration may also be unfusionnement two companies that are in various stages of production (eg, an upstream firm (ONGC) and a downstream firm (HPLC). Ainsifusionnement with a company that is at a later stage in the production process (and therefore closer to the end consumer) is known as integration del'avant. 

Vertical integration may be contrasted with horizontal integration, the merger of companies that together are at the same stage of production, for example, the merger of two companies in upstream or downstream of the two companies.

Membership further back in the process (If a downstream firm merged with a company before, for example) is known as backward integration. An example of backward integration in India is Reliance Industries Limited, which began with textile Polyester petrochemical and refining and exploration and production now.

The integration of two organizations that are completely different business lines is sometimes referred to as the integration of conglomerate. 

Companies are upstream or downstream of each other depending on whether they are closer or farther away from the final consumer (the "sea", so to speak, the river coulantproduction). The advantages of vertical integration come from the higher capacity that gives organizations control access to inputs (And lecoût to control the quality and delivery of inputs).

Some of the best examples of vertical integration are considered in the Oil Industry. In 1970 and 1980, many companies engaged in étaientprincipalement exploration and extraction of crude oil refineries has decided to acquire downstream distribution networks. companies like Shell and BPsont came to control all steps are in contact with a drop of oil from the North Sea or Alaska the fuel tank of the vehicle.

Oil companies, national and multinational companies have often adopted a vertically integrated structure. Some of these companies are:

 Exxon Mobil: é t é it form ed in 1999 by the merger of two companies é t é s and Exxon Mobil. before the merger, Exxon é t é any significant upstream Mobil is a socié t é chemical and its main commodities included ol e f ines and aromatics, the e n e t hyl è glycol and poly è é t hyl n e.

After the merger, the company operates in the following areas:

Upstream

ExxonMobil Exploration Company

ExxonMobil Development Company

ExxonMobil Production Company

ExxonMobil Gas Marketing Company and nutrition

ExxonMobil Upstream Research Company

ExxonMobil Upstream Ventures

Downstream

ExxonMobil Refining and Supply Company

Sea River Maritime

ExxonMobil Fuels, Lubricants & Marketing Company Sp e c e s ialit

ExxonMobil Research and Engineering Company

International shipping

Chemical

ExxonMobil Chemical Company

ExxonMobil is an industry leader in almost all aspects of energy and petrochemicals. Its activities range from exploration and production of oil and gas to coal and copper mining, refining petroleum products marketing of fuels (under Exxon. Esso Mobil and brands), waxes, bitumen and chemicals. In addition, ExxonMobil is active in the production of electricity.

ExxonMobil Chemical is one of the largest petrochemical companies in the world. 

Products include olefins, aromatics, synthetic rubber, polyethylene, polypropylene 

and packaging films oriented polypropylene. The company operates 54 manufacturing plants in 20 countries, and markets its products in more than 150 countries.

 Shell: Shell int e g e r vertical structure which has d e v e t elopper commercial comp ence in all é t é apes that int g ration vertical initial research of oil (exploration) through its r e c Olte (Production) , transportation, refining and finally e n g ociation and marketing established the comp e t ences in the basic soci é t e a t e e e e bottom. similar comp e t e g ences are alement d e v e s elopp for natural gas, which has become one of the companies most importantesdans which Shell is involved, and which contributes a significant proportion of b e n e f ices company.

Subsidiary of Royal Dutch Petroleum, Shell Oil acquired Pennzoil-QuakerState, the largest producer of motor oil. The vertical acquisition, which includes more than 2,000 Jiffy Lube oil change centers was consistent with the strategy of the parent company Shell to acquire a company that completes its lubricant and oil products businesses and chain Shell petrol station.

Royal Dutch-Shell is internationally since its beginnings. Formed in 1907 as an alliance between Anglo-Dutch Shell Transport and Trading and Royal Dutch Petroleum Company, Royal Dutch-Shell group was at that time the only serious rival Rockefeller International Standard.

By the time the Anglo-Persian was formed in 1909 and Rockefeller's Standard Royal Dutch-Shell had already established positions of power in the international oil industry. But while the Anglo-Persian was a latecomer, he had the unique advantage and competitive crucial that this was the prime mover in the development of oil reserves in the Middle East, where the first oil field in Masjid -i-Suleiman in southern Persia (later Iran) was a giant, containing vast reserves of crude oil that can be produced in large quantities at low prices.

From these beginnings different companies that become large international companies, acting sometimes as rivals, sometimes as allies, proceeded to establish their control over the international oil industry Each of them has begun to produce crude oil national treatment to its own refineries and sell the resulting products to the final consumer through its own outlets.

Everyone also has sought to achieve, as far as possible, a balance between these phases of its operations. This policy of vertical integration operational, each major was able to coordinate the flow of oil under its control from its oil fields to its markets.

In practice, no major was able to achieve a perfect balance between its upstream operations (production) and downstream (refining and marketing). Majors with more markets than production has not been able to find new oil fields at will, while others with more output than competitive markets may ferocious battles with rivals established if they tried to enter new markets . To correct imbalances and mitigate rivalries, the majors have adopted a series of measures - they have contracted to sell each other products and crude, sometimes in very large quantities, they joined the market sharing agreements , the most famous of the 1928 agreement to divide markets Achnacarry by a quota system, and they have formed regional alliances with majors in which excess capacity upstream joined forces with others with excess capacity downstream, so they can balance their joint operations without competing. With these provisions, the international flow of oil came to be channeled not through open and transparent markets for crude oil and products, but through closed circuits majors vertically integrated systems.

There was, at the time and later, the differences between those who argued that vertical integration was the most cost-effective to organize the international circulation of oil, and those who saw vertical integration is not an economic necessity, but as a means to eliminate competition and allow majors to control the industry. To a large extent, however, vertical integration has historically been determined by the beginning of Rockefeller domination. Once he had established a high degree of monopoly control, it has become a competitive necessity for future new entrants, such as Royal Dutch - Shell, and later the Anglo-Persian, integrate vertically in order to avoid having to negotiate dissimilar conditions to established competitors for the purchase and / or sale of oil.

Reliance-A case study:

Dependence Group, founded by Dhirubhai H. Ambani (1932-2002), is Greater India 's private enterprise, with businesses in the energy and matériauxvaleur chain.Group 's annual revenues are in excess of U.S. $ 66 billion. flagship company, Reliance Industries Limited, is a Fortune Global 500entreprise and is the largest private sector company in India. 

Backward vertical integration has been the foundation of the evolution and growth of Reliance. From textiles in the late seventies, Reliance pursued unstratégie of backward vertical integration - from polyester fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. 

The Group Activities duration exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles, retail and special economic zones Infotel . 

Dependence enjoys its Global Leadership in Business, being the largest polyester yarn and fiber producer in the world and among the top five producers in the world ADIX petrochemical products.

Main stages of the history of the Reliance group:

1958 - Dhirubhai Ambani Reliance Commercial Corporation began in Mumbai.

1966 - Reliance entered the textile industry and set up a mill in Naroda, Ahmedabad.

1975 - The World Bank team visited the mill and says it is also modern and well managed than those in developed countries.

1977 - Reliance has released the first IPO in India

1985 - Reliance Total assets: $ 227 million.

1986 - Reliance Capital, an investment bank was created.

1988 - Reliance Industrial Infrastructure, a provider of oil pipeline, came online.

1988 - Reliance sales exceed $ 404 million.

1991 - Hazira petrochemical plant in service.

1992-Reliance became the first Indian company to raise capital on international markets through deposits received global supply, and establishes a new record with a problem that Reliance has received more than 1 million requests from investors .

1993 - Reliance Petroleum went public in India largest public offering to date. Sales exceeded $ 909million, which Reliance Petroleum India's largest publicly traded company. Reliance also offered the first euro bond issue convertible.

1994 - Honorary Member of the Textile Institute (UK). Price is limited to 50 members who have significantly advanced the fiber industry.

1994 - Reliance offered the second Euro issue Global Depository Receipts.

1995 - Reliance Net income exceeded $ 242 million.

1995 - Reliance Mutual Fund, a provider of asset management and mutual fund launched.

1997 - Reliance became the first company in Asia to issue bonds from 50 to 100 per year in the United States.

1997 - World largest cracker multifeed commissioned Hazira.

1998 - sales Reliance head 3 billion and total assets will be around $ 8 billion.

1999 - World's largest oil refinery complex was commissioned at Jamnagar.

1999 - Reliance Infocomm, a provider of mobile service is launched.

2000 - Reliance turnover exceeding 4 billion, and total assets of $ 11.8 billion.

2002 - Reliance Industries Ltd and Reliance Petroleum Ltd. Reliance Industries in fusion. The new company was named to Forbes Global 500 in 2003, entering at position 306.

The backward integration of Reliance Industries

Objectives of the study:

The objectives of the proposed research are:

For t e diff e r udier activity ales é ê t s that can re int e g r e s s è successfully in companies pe r es t roli è è r es and gas.

For t e udier the effects of int e g ration vertically on the role diferrent pe t th r es and gas.

To analyze the effects of int e g ration vertical Reliance Industries.

Research Methodology

Secondary data collection

The given e e s side will be collected from oil é j int e g e r s and gas companies and it will give you an overview ç u the diff e r e s ales activity that can re ê t int e g r e e s s è successfully.

The given e e s e would then simultaneously to analyze the effect of int e g ration vertical Reliance Industries.

Literature

Oil and gas value chain:

Value chain of crude oil

Natural Gas value chain

Various activities that can be successfully integrated oil and gas industry Royal Dutch Shell

Shell

From 1907 to 2005, the Royal Dutch Petroleum Company and the "Shell" Transport and Trading Company, plc were the two public parent companies of a group of companies collectively known as "Royal Dutch / Shell Group". Activities of operations were conducted through subsidiaries of the parent companies. In 2005, Royal Dutch Shell plc became the parent company's unique Royal Dutch Petroleum Company and the "Shell" Transport and Trading

Company, plc, became the Shell Transport and Trading Company Limited.

Business

Shell is one of the world's largest independent oil and gas in terms of market capitalization, operating cash flow and production of oil and gas. They aim to maintain strong operational performance and continue to invest mainly in countries with the necessary infrastructure, expertise and growth potential remains. These countries are Australia, Brazil, Brunei, Canada, China, Denmark, Germany, Malaysia, Netherlands, Nigeria, Norway, Oman, Qatar, Russia, the United Kingdom and the United States.

They bring new oil and gas production of major developments in the field. They are also investing in the growth of their activities integrated gas. For example, Pearl GTL completed his rise to power in late 2012. Downstream, they have innovative ways of LNG market, for example through the use of LNG in the transport sector.

At the same time, they are also prospecting for oil and gas in geological formations prolific classics, such as those found in Australia, Brazil and the Gulf of Mexico. They are also deposits of hydrocarbons in formations such as low-permeability reservoirs in the United States, Australia, Canada and China, which can be developed by fracturing techniques.

Shell also has a concentrated portfolio of refineries and chemical plants. In addition, they are one of the major producers of biofuels and fuel retailer in Brazil, through a joint venture Raizen. They have a strong position in detail not only the major industrialized countries but also in developing ones.

Integration of oil and gas

Upstream International manages upstream activities outside the

Americas. It explores and recovers crude oil, natural gas and natural gas liquids, liquefies and transports gas and operates the upstream and infrastructure the way necessary to bring the oil and gas market. Upstream International manages Shell LNG and GTL companies. Since January 2013, it manages its business primarily by industry, with this structure overlapping organizations of each country. This organization is supported by activities such as exploration and business development.Previously, activities were organized primarily by geographic location.

Upstream Americas manages the upstream business in North and South America. It explores and recovers crude oil, natural gas and natural gas liquids, gas transmission and operates the infrastructure upstream and the way necessary to bring the oil and gas market. Upstream Americas also extracts bitumen from oil sands that is converted into synthetic crude oil. In addition, it handles the wind energy business in the United States. It manages its business sector, supported by activities such as exploration and business development.

Downstream manages Shell's refining and marketing activities for oil products and chemicals. These activities are organized into classes globally managed business, but some are managed at regional level or provided by support units. Refining includes the manufacture, supply and shipping of crude oil. Marketing sells a range of products such as fuels, lubricants, bitumen and liquefied petroleum gas (LPG) for domestic use, transport and industry. Manufactures and markets chemicals petrochemicals for industrial customers, including raw materials for plastics, coatings and detergents. Downstream also trades Shell flow of oil and other energy-related products, supplies downstream firms, governs shipping service marketing and trading of gas and electricity and supplies. In addition, downstream oversees the interests of Shell in alternative energy (including biofuels, but excluding wind) and CO2 management.

Projects & Technology manages the delivery of major projects and leads Shell research and innovation to create technology solutions. It provides technical and technological capabilities covering both upstream and downstream. It is also responsible for providing functional leadership across Shell in the areas of safety and the environment, and contracts and procurement.

Effects of vertical integration (Benefits)

(Case Study: Exxon Mobil)

On December 1, 1998, Exxon Corporation ("Exxon") and Mobil Corporation ("Mobil") have signed an agreement to merge the two companies. November 30, 1999, pursuant to the agreement, a wholly owned subsidiary of Exxon Mobil has been merged with that Mobil became a wholly owned subsidiary of Exxon. At the same time, Exxon changed its name to Exxon Mobil Corporation.

Coincides with the merger, ExxonMobil announced a new organizational structure based on a concept of eleven different companies worldwide designed to enable the company to be more competitive in the energy sector in the changing world: five global companies upstream - exploration, development, commercialization of gas production and upstream research, four downstream businesses - refining and supply, fuels marketing, lubricants and petroleum specialties, and technology, in addition to one chemical company and a company of coal and minerals.

During the first 11 months of 1999, the United States and outside North America, Exxon activities were carried out, either directly or through affiliates, exploration by Exxon Exploration Company, development activities selected by Exxon upstream development and production and other development activities by Exxon Company, USA and Exxon Company, International. In Canada, the activities of Exxon exploration and production were carried out by the Human Resources Division of Imperial Oil Ltd., which is 69.6 percent owned by ExxonMobil.

During this same period, Mobil conducted exploration, development and production in the United States, Canada and around the world through its various subsidiaries and affiliates, including Aera Energy LLC ( "Aera"), a joint venture with Shell Oil Company in California.

After the merger of Exxon and Mobil effective December 1, 1999, has been completed, the activities of ExxonMobil were made, either directly or through affiliates, to the exploration of ExxonMobil Exploration Company, for activities development chosen by ExxonMobil Development Company and the production and development of other activities by ExxonMobil Production Company. The activities of Imperial Oil Limited and Aera has remained the same.

The impact of the merger on the activities of Exxon and Mobil in 1999:

United States

On the exploration and delineation of hydrocarbon resources further. At the end of 1999, stocks of ExxonMobil undeveloped acreage totaled 7.8 million net acres.ExxonMobil has been active in the onshore and offshore areas in the lower 48 states and Alaska. A total of 27.0 net exploration and delineation wells were completed in 1999.

In 1999, 381.9 net development wells were completed in and around mature fields in the lower 48 states inside.

Participation in the production of Alaska and the development continued and a total of 12.1 net development wells were drilled in 1999.

ExxonMobil net area in the Gulf of Mexico at the end of 1999 was 3.8 million acres. A total of 39.4 net exploration and development wells were completed during the year and the continued development of several projects in the Gulf of Mexico in 1999.

Genesis field, located at 2600 meters water depth, began in January 1999 to produce a draft caisson vessel (DDCV). Ursa field, located at 3900 meters water depth, began production in March 1999, a platform tensioned cables (TLP). In November 1999, production began on the ground Chinook.

Fields operated by ExxonMobil Hoover and Diana was jointly developed with DDCV located in 4800 feet of water on the field Hoover. Drilling activities of construction and development continued in 1999, with a planned start in mid-2000.

The scope of the Nile, located at 3,500 meters water depth, is a development of satellite underwater near facilities using existing platforms. Detailed engineering is underway, with production scheduled to start in mid-2001.

The ExxonMobil-operated Mica field, located at 4500 meters water depth, is a subsea development satellite using existing platform. Detailed engineering and construction is underway, with production scheduled to start in mid-2001.

ExxonMobil operates deposits Marshall and Madison, located at 4800 meters water depth, are proposed to develop satellite submarines using the Hoover-Diana DDCV.Detailed engineering is underway, with production scheduled to start in 2002.

Canada

Gross production of heavy oil business in Cold Lake averaged 132,000 barrels per day in 1999. End of the year, government approval was received for the next 30,000 barrels per day extension. The Sable Offshore Energy Project began production in December 1999. Terra Nova is on track for implementation in the first half of 2001.

Europe

France

Net area of ExxonMobil at the end of 1999 was 0.9 million net acres, with 0.5 net exploration and development wells completed during the year.

Germany

A total of 3.9 million acres were held by ExxonMobil in Germany at the end of the year, with 7.5 net exploration and development wells were drilled and completed during the year. The project began to develop offshore A6/B4, with planned start in 2000.

Netherlands

ExxonMobil interest in licenses totaled 2.8 million net acres at year-end 1999. In 1999, 8.0 net exploration and development wells were drilled.

In 1999, the offshore gas field and onshore fields D15-FA/FB Norg-Zuid and Appelscha started with the gas plant Gaag II. The second phase of the development of Rotterdam oil field has also started. Construction is underway on the new onshore gas field Saaksum East.

Norway

Net Interest ExxonMobil licenses by year-end 1999 amounted to 1.7 million acres, all offshore. ExxonMobil participated in 13.6 net exploration and development and finishes in 1999.

Production was launched on four facts: Balder, Jotun, Aasgard and Oseberg East. Development projects on the ground for Snorre B, Sygna, Ringhorne and Grane fields are underway.

UK

Over the years ExxonMobil has acquired interests in three new blocks. Net area was about 3.5 million acres at year-end, all étrangers.Un total of 34.0 net exploration and development wells were completed during the year.

There were successful start-ups of the Ketch, Corvette, Buckland, Bell, Jupiter II and Gannet fields G. Several major projects are underway, including Shearwater, Elgin / Franklin, Triton and Cook.

Asia-Pacific

Australia

ExxonMobil net year-end 1999 acreage holdings totaled Australia 10.4 million acres. ExxonMobil has drilled a total of 22.9 net exploration wells élaborationde Australia in 1999. Production began on the ground Blackback in 1999.

Indonesia

Deliveries of natural gas from the North Sea Sumatra "A" on the field began in mid-1999. This gas will complement other local fields supplying gas to Pertamina at PT Arun LNG. Net area of 9.1 million acres at year-end. ExxonMobil participated in 16.5 net exploration and development and finishes in 1999.

Malaysia

ExxonMobil holds interests in production sharing contracts covering 5.8 million net acres offshore Malaysia. During the year, a total of 17.6 net exploration and development wells were completed. Development drilling was conducted Seligi-F and A-Bekok platforms / B, respectively.

Papua New Guinea

At the end of 1999, the area of ExxonMobil totaled 3.9 million net acres, including 1.8 net exploration and development wells completed during the year.

Thailand

Net area of the concession ExxonMobil Khorat totaled 15,000 net acres at year-end, with 1.6 net exploration and development wells completed during the year.

Other countries

Angola

Development began the Girassol field in Block 17. Development planning is underway for ExxonMobil operated by discoveries in Block 15 and Block 17 other areas.ExxonMobil net year-end 1999 totaled 4.3 million shares land net acres and 3.2 Exploration and development wells were completed during the year.

Argentina

ExxonMobil net acreage totaled 1.3 million acres at the end of the year, with 4.1 net exploration and development wells completed during the year.

Azerbaijan

At the end of 1999, the net area of ExxonMobil totaled 0.2 million acres, which are located in the offshore area of the Caspian Sea in Azerbaijan. Drilling continues with six gross wells ( 0.5 net) drilled and completed in 1999.

Construction was also completed on the pipeline route in the West.

Equatorial Guinea

ExxonMobil net area totaled 0.7 million acres at year-end, with exploration wells and development 3.6 completed during the year. Construction is underway on the development of the Jade scheduled to start in 2000.

Kazakhstan

Construction began on the Caspian Pipeline Consortium (CPC) pipeline, which will be dedicated to transporting oil production Tengiz to the Black Sea. The pipeline to move the high cost of rail and barge transport being used. ExxonMobil net area totaled 0.4 million acres at the end of the year, with 0.8 net exploration and development wells completed during the year.

Nigeria

ExxonMobil net acreage totaled 1.4 million acres at year-end, with 13.5 net exploration and development wells completed during the year. Development activities in deepwater offshore Nigeria continues to block 212 Bonga. A production sharing contract in deep water (PSC) order was issued by the Nigerian government in 1999 to legislate tax provisions of the PSC.

Qatar

Development activities continued on two major liquefied natural gas (LNG) in Qatar, Ras Laffan Liquefied Natural Gas Company Limited (RasGas), Qatar Liquefied Gas Company Ltd. (Qatargas). RasGas began operations in 1999 after the completion of its first LNG train. RasGas has a long-term contract with Korea Gas Corporation for the supply of 4.8 MTA (million tons) of LNG. Train 2 is currently under construction with expected start-up in 2000. RasGas also concluded that MTA 7.5 long-term sales and purchase agreement with Petronet LNG Limited of India. Initial deliveries are scheduled to Petronet to begin in 2003. Qatargas LNG cargo 200th Delivered icts since 1999 falling on start-up in 1996. Qatargas HAS long-term contracts to supply LNG to 6 MTA of gas and electric utilities in Japan. Progress continued on negotiations and marketing activities in 1999 on the Enhanced Gas Utilization Project to Produce natural gas from Qatar's North Field to supply for domestic and regional industries.

Republic of Yemen

ExxonMobil's net acreage in the Republic of Yemen production sharing Areas Totaled 0.9 million acres onshore at year-end. During the year, 5.5 net exploration and development wells drilled and completed Were.

Venezuela

The Cerro Negro heavy oil project Began production in November 1999. Construction activities on the Upgrader Facility at the Jose Industrial Complex are on schedule for a 2001 startup. ExxonMobil's net acreage Totaled 0.5 million acres at year-end with 19.0 net exploration and development wells completed falling on the year.

Worldwide Exploration

Exploration activities Were Underway in several Areas in Which Has No ExxonMobil, established production operations. A total of 60 million net acres Were Held at year-end, net exploration wells and 3.0 Were falling on the completed year.

Downstream Operations:

Effects of Vertical Integration (demerits)

Risks Involved With reference to vertical integration in of Shell's operations:

Fluctuating prices of crude oil, natural gas, oil products and chemicals.

Prices of oil, natural gas, oil products and chemicals are affected by supply and demand, both, globally and Regionally. Moreover, prices for oil and gas can move indépendamment from Each Other. Factors That affect supply and demand include operational issues, natural disasters, weather, political instability, conflicts, economic conditions, and measures by major oil-exporting countries. Could have a price fluctuations material effect. For example, in a low oil and gas price environment, generate less revenue Shell Would icts from Upstream production, and as a result some long-term projects might Become

less profitable or even incur losses. Additionally, low oil and gas prices in the debooking Could result of Proved oil or gas reserves, If They Become uneconomic in this kind of environment. Prolonged périodes of low oil and gas prices, rising gold costs: Could aussi result in delayed or canceled projects Being, as well as in the impairment of some assets. In a high oil and gas price environment, experience sharp shell Could Increase in cost and under some production-sharing contracts, entitlement to Proved reserves Would Be Reduced. Higher prices aussi Could Reduce demand for products. Lower demand for products might result in lower Profitability, Particularly in Downstream business.

Competitive Forces:

Shell faces competition in each Stock of Their businesses businessman. They seek to differentiate while Their products, Many of Them are competing in commodity markets such. If the dépenses are not adequately managed, cost efficiency and deteriorate Could unites Costs may it increase. This in turn erodes the competitive position Could. Shell aussi Compete with government-run oil and gas companies, Particularly in seeking access to oil and gas resources. Today, government-run thesis companies control vastly Greater quantities of oil and gas resources than the major, publicly held oil and gas companies. Government-run entities Have access to significant resources and may be motivated by political or other factoring in Their business decisions, Which may harm Shell's competitive position or hinder access to desirable Their projects.

Future Hydrocarbon Production

Shell faces challenges in Developing Numerous capital projects, Especially wide ones. Challenges include uncertain geology, frontier conditions, the existence and availability of technology and engineering Necessary resources, availability of skilled labor, project delays, expiration of licenses and potential cost overruns, as well as technical, fiscal, regulatory, political and other conditions. These challenges are Particularly relevant in some emerging market countries and Developing, Such as Iraq and Kazakhstan, and in Frontier Areas, Such as the Arctic. Such potential obstacles may odd delivery of thesis projects, as well as Shell's Ability to FulFil related contractual Commitments.

Future oil and gas production will depend on access to new reserves through exploration Proved, negotiations with owners of other gouvernements and Proved reserves and acquisitions, as well as new technologies Developing and Applying and recovery processes to Existing fields and mines. Failure to replace reserves Proved Could result in lower future production.

OIL AND GAS PRODUCTION AVAILABLE FOR SALE MILLION BOE [A]

Erosion of Business Reputation

Shell is one of the world's leading energy brands, brand and reputation and Its assets are significant. The Shell General Business Principles and Code of Conduct Govern how individual companies Shell and Its conduite Their affairs. It is a challenge for Them to Ensure That All employed and contractors, well above 100.000 in total, comply with the principles. Failure - real or Perceived - thesis to follow principles, or other real or Perceived failures of governance or Regulatory Compliance, Could Harm Their reputation. This Could Impact Their license to operate, brand damage, harm Their Ability to secure new resources and Their Ability to limit access the capital market.

Development and Deployment of New Technologies

Technology and innovation are essential to Shell. If They Do not economic development of the right technology, do not Have access to it or do not deploy it Effectively, the strategy and delivery of Their license to operate may be adversely affected. Their operations are in environments Where The most advanced technologies are needed. While technologies thesis are Regarded as safe for the environment with today's knowledge, there is always the unknown or unforeseeable Possibility of environmental impacts That Could Harm Their reputation, license to operate or exposure to litigation or sanctions.

Rising Environmental Concerns

In the future, in order to help meet the world's energy demand, the output is expected to rise more and output HAS to come from unconventional sources than at present. Energy intensity of generation of oil and gas from unconventional sources can be Higher Than That of generation from conventional sources. Therefore, it is expected the CO2 intensity That Both of production, as well as absolute Upstream CO2 emissions, will Increase as the business grows.

Such examples of Developments are our expansion of oil sands activities in Canada and gas-to-liquids project in Qatar.

Additionally, as Production Increases from Iraq, CO2 emissions from flaring are expected to rise. Over time, it is expected a growing share of That CO2 emissions will be subject to regulation and carry a cost. If They Are Unable to find Economically viable, as well as acceptable Publicly, Solutions That Reduce CO2 emissions for new and Existing projects or products, may be incured Additional costs, delayed projects or Reduced production in some projects.

Moreover, continued public and political attention to climate change to Concerns, Including Existing and Future Regulatory frameworks to Reduce greenhouse gas emissions, Could result in Increasing Production costs: lengthening project implementation times and Reducing demand for hydrocarbons.

Health, Safety, Environment and Security Risks.

The health, safety, security and environment (HSSE) Risks to Which shell is exposed Potentially a wide spectrum cover, Given the geographic range, operational diversity and technical complexity of Their daily operations. They Have operations, Including oil and gas production, transportation and shipping of hydrocarbons, refining and, in difficult geographies or climate zones, as well as environmentally sensitive areas, Such as the Arctic or maritime environments, Especially in deep water. These and other operations exposed to the risk em, Among Others, of major process safety incidents, effects of natural disasters, social unrest, personal health and safety lapses, and crime. If a major HSSE risk materialized, Such As An explosion or hydrocarbon spill, this

Could result in injuries, loss of life, environmental harm, disruption to business activities and, DEPENDING ON Their causes and severity, material damage to reputation and loss of Eventually license to operate. In some circonstances, Could be Imposed liability without regard to Shell's fault in the matter. Requirements governing HSSE matters Often change and are Likely to Become more stringent over time. Additional costs can be significant in the future incured Complying with Requirements Such gold as a result of violations of, or under passif, HSSE laws and règlements, Such as fines, penalties, clean-up costs and third-party claims.

Self-insurance of risk exposures

Shell Provide insurance coverage insurance filiales to Shell entities, Generally up to $ 1.15 per event and one billion Usually limited to Shell's percentage interest in the relevant entity. The kind and extent of the coverage is equal Provided to That Which Is Otherwise Commercially available in the third-party insurance market. While from time to time the insurance filiales may seek reinsurance for some of Their risk exposures, Such reinsurance Would not Provide Any material coverage in the event of year BP Deepwater Horizon incident like. Similarly, in the event of a material environmental incident, there Would Be produit no material available from third-party insurance companies to meet Shell's obligations.

Business and Operating Environment in Nigeria

There are various Risks in Nigerian operations. These Risks include: security issues surrounding the safety of people, host Communities, and operations; Ability to enforce Existing contractual rights, limited infrastructure, and potential legislation That Could Increase taxes or Costs of operation. The Nigerian government is contemplating new legislation to Govern the petroleum industry Which, if Passed into law, Would Likely Have a significant adverse impact on Shell's Existing and future activities que country.

Operations in more than 70 countries, with Differing degrees of political, legal and fiscal stability

Developments in politics, laws and règlements can - and do - affect operations. Potential Developments include: forced divestment of assets, expropriation of property, cancellation or forced renegotiation of contract rights; Including additional taxes windfall taxes, restrictions on deductions and retroactive tax claims; import and export restrictions, foreign exchange controls, and changing environmental disclosure and règlements requirements.

Exposure to social instability, terrorism, acts of war, piracy and government sanctions

As seen in North Africa and the Middle East, social and civil unrest, both, Within The Shell Which countries in and operate Internationally, can - and does - affect operations. Potential Developments That Could include business impact international sanctions, Including war conflicts, acts of terrorism and political or economic acts of piracy on the high seas, as well as civil unrest and local security Concerns That Threaten the safe operation of facilities and transportation of products. For example, EU sanctions Have prohibited from Shell Producing oil and gas in Syria, and the USA and the U.S. Imposed sanctions Have Relating to Transactions Involving Iran and Sudan, Among other countries. Such Risks if materialized, They Could result in injuries and disruption to business activities.

Relying heavily on information technology systems

Many of the operations of business processes depends on the availability of information technology (IT) systems. IT systems are increasingly Concentrated in terms of geography, number of systems, and key contractors Supporting the delivery of IT services. Shell, like other multinational companies Many, has-been the target of Unauthorised Access Attempts to gain through the internet to our IT systems, more sophisticated Including Attempts Often Referred to as advanced persistent threat.Shell seeks to detect and Investigate all security incidents Such, aiming to Prevent Their recurrence. Disruption of critical IT services, information or Breaches of security, adverse consequences Could have for Shell.

Estimate of Proved Oil and Gas Reserves

The estimation of Proved oil and gas reserves and Judgements Involves subjective determinations based on available geological, technical, contractual and economic information. The estimate may change Because of new information from drilling activities produce gold, gold exchange factoring in economic, Including exchange in the price of oil or gas exchange and gold in the taxation of Regulatory Policies gouvernements host. It may alter aussi acquisitions and divestments Because of, new discoveries, and extensions of Existing fields and mines, as well as the implementation of Improved recovery techniques.

Joint Ventures or Associates Degree of Control & Reduce Ability to Identify and Manage Risks

A significant share of capital is Invested in joint ventures or associates. Where in boxes Shell is not the operator, They Have limited impact over, and control of, the behavior, performance and Costs of operation of joint ventures or associates. DESPITE HAVING not control, They Could still be exposed to the Risks associated with operations thesis.

For example, Shell's partners or members of a joint venture or associate year (Particularly local partners in developing countries) may not be ble to meet financial or other obligations Their to the projects, threatening the Viability of a Given project.

Effects of Vertical Integration on Reliance Industries Limited:

RIL is a fully integrated company with operations spanning exploration and Production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles, retail and telecommunication.

Reliance is the Largest producer of polyester fiber and yarn, Having The Largest refining capacity at Any single location.

They Have Their fully integrated businesses businessman across the materials and energy value chain through a strategy of backward vertical integration. The manufacturing facilities in India span across Allahabad, Barabanki, Dahej, Hazira, Hoshiarpur, Jamnagar, Nagothane, Nagpur, Naroda, Patalganga, Silvassa and Vadodara.They Have filiales and associate companies, extended to USA, Australia, Europe, East Africa, Middle East and Asia.

Oil & Gas Exploration and Production business has Witnessed output of 5.67 million barrels of crude oil and condensate, and a gas production of BCF 551.31 in FY 2011-12 through KG D6 operations. The Panna Mukta fields produced 10.06 million barrels of crude oil and 71.24 BCF gas in the same period. Have beens aussi Significant Investments made ​​in shale gas business with efforts focused on drilling, completion and facility installations. Joint Ventures with Chevron, Pioneer Natural Resources and Carrizo resulted in gross output at an exit rate of 233 MMCFPD of gas and 34.7 mbpd of liquids in December 2011. In addition to JVs in North America, Reliance aussi made ​​an equity investment along with Pioneer in the development of midstream assets.

During the year 2011-12, in Petroleum Refining and Marketing business, Reliance processed 67.6 million tons of crude and Achieved year average of109% utilization, Which is Higher Than the average utilization rates for refineries globally.

Exports for the refined products in the reporting period Stood at U.S. $ 36 billion (INR 1831.32 billion)

In the Petrochemical business, Reliance maintained leadership position in the domestic market. Reliance aussi Introduced a new random co-polymer grade SX 100, catering to the fast growing packaging sector and high clarity random PP grades Which are Currently Being imported in India.

Reliance aussi collaborated with Ministry of textile to create awareness on new products and benefit of geotextiles in road, railways and river embankment.

In the Chemicals business, crackers at Hazira, Nagothane, Dahej and Vadodara are integrated petrochemical complexes Among the upstream with downstream refining and chemical facilities. They are the leading producer of Butadiene, Benzene, and PBR LAB in India. They Have Their leadership position aussi maintained in aromatic segment Constituting benzene, toluene and xylene.

Reliance continued to hold top rankings in Polyester Fibre and Filament Business. Consolidated polyester capacity of the company stood at 2.4 Million MT.

According to PCI, in FY 2011-12, Reliance held the 1st rank in polyester fibre and filament capacity, 5th rank in PX and 8th rank in PTA and MEG. They catered to 38% of the domestic market and exported to over 100 destinations.

There is also immense opportunities in natural gas, by virtue of it being a clean and sustainable source of fuel; as also in elastomers, owing to growing demand from the automotive sector.

Set up of RIL Jamnagar Refinery

Production volumes increased 33% to a record level of 5.27 million tonnes in th e first nine months of 1998-99, despite the temporary dislocation in feedstock supplies at the Hazira petrochemicals complex in October 1998.

Total production volume slated to touch nearly 7 million tonnes for the full year - final production volume for the year was 20% higher than beginning of the year estimates.

Sales revenues were up 11% at Rs . 109.5 billion (US$ 2.6 billion) in the first nine months. This comprised of the impact of volume growth at 23%, partially offset, to the extent of 12%, by the decline in average product selling prices.

Reliance sold 95% of its production within India.

Value added export opportunities selectively pursued with export revenues increasing 145% to Rs . 5.12 billion (US $ 121 million).

Exports focussed on quality conscious markets of US and Europe, in recognition of the superior quality of Reliance ' s products.

Break-down of Reliance Sales (excluding exports of RPL) in 2000-01

Break down of total revenue for 2000-01

Recent Developments:

On 25 September 2012, RIL and the Venezuelan state oil company, Petroleos de Venezuela, SA (PDVSA) signed a 15 year heavy crude oil supply contract and an MOU to further develop Venezuelan heavy oil fields. PDVSA will supply between 300,000 and 400,000 barrels per day of Venezuelan heavy crude oil to Reliance's two refineries in Jamnagar under a 15-year crude oil supply contract. As per the MOU, Reliance will explore upstream options for joint participation in heavy oil projects of the Orinoco Oil Belt.

• RIL selected Fluor Corporation to provide project management services for its projects being executed at its refining and petrochemical complex in Jamnagar, India. These projects represent one of the largest investments globally.

• RIL selected Phillips66's E-Gas technology for its coke gasification facility. This facility will process petroleum coke & coal into synthesis gas. Phillips66 will license the technology to RIL and also provide process engineering design and technical support relating to the gasification technology process area.

• RIL has selected Technip as a technology supplier and engineering contractor to implement its Refinery Off-Gas Cracker (ROGC) project. This is part of the petrochemical expansion project being executed at Jamnagar, India. The ROGC plant will be amongst the world's largest ethylene crackers and will be using refinery off-gas as feedstock. This plant will provide feedstock for new downstream petrochemical plants also being built at Jamnagar.

• Reliance Industries Limited (RIL) has selected Foster Wheeler as an engineering and procurement services contractor for its Paraxylene project. This is part of the expansion project being executed at RIL's world-scale Jamnagar refining and petrochemical complex in Gujarat.

• Reliance Exploration & Production DMCC, wholly owned subsidiary of RIL has completed the transaction for divestment of its 80% working interest and operatorship in the production sharing contracts (PSCs) for Rovi and Sarta Blocks in the Kurdistan Region to the subsidiaries of Chevron.

• Reliance Exploration and Production DMCC, a wholly owned subsidiary of Reliance Industries Ltd. (RIL), has signed the completion documents for divestment of its 25% Working Interest in the Production Sharing Contract (PSC) for Yemen Block-9 with Medco Yemen Malik Ltd., a wholly owned subsidiary of PT Medco Energi Internasional Tbk of Indonesia. The effective economic date of the transaction is 1st January, 2012 and the transaction has been approved by the Ministry of Oil and Minerals of Yemen.

• The Board of Ex-Im Bank of the United States has voted to extend the single largest financing transaction of $ 2.1 billion to Reliance Industries Limited (RIL). This includes a $ 1.06 billion direct loan and to guarantee a $ 1.06 billion JPMorgan Chase loan to the Company. The loan will be primarily used to finance goods and services procured from exporters and suppliers in the United States as part of Reliance's expansion projects at Jamnagar, Gujarat.

• RIL signed a $ 2 billion equivalent loan with nine banks covered by Euler Hermes Deutschland AG. ("Euler Hermes") in May 2012. The loan will be primarily used to finance goods and services procured from German suppliers as part of the petrochemical expansion projects at Jamnagar, Hazira, Silvassa and Dahej in India.

The Global Reporting Initiative (GRI) has awarded A+ level to RIL's Sustainability Report 2011-12. This is the 7th consecutive year that RIL has received the highest application level on sustainability reporting. RIL is also the first Indian company to adhere to the GRI 3.1 Oil & Gas Sector Supplement, released in February 2012.

Conclusions and Recommendations:

Reliance Industries Limited has successfully vertically integrated its operations and is thus using the products/by products of one business in another.

This also helps ensure the availability of raw material/feedstock in times of supply crises. Thus Reliance, to an extent has secured itself against supply shocks.

Reliance has also started its operations with joint ventures in other countries. This, on one hand will increase revenues and on the other, enhance RIL’s technologies with exposure to operations in harsh environmental conditions.

There are however, certain risks involved when operating in other countries. ( HSE risks, political, legal and fiscal instability, exposure to terrorism, &reduction in degree of control of operations, to name a few) These should be assessed first before entering into a joint venture or operating as a company in foreign lands.

Also, fluctuating oil prices can affect operations in both upstream and downstream.

In a low oil and gas price environment, less revenue will be generated from Upstream production, and as a result certain long-term projects might become less profitable, or even incur losses.

In a high oil and gas price environment, a sharp increase in refinery cost will occur. Higher prices could also reduce demand for products and lower demand for products might result in lower profitability, particularly in Downstream business