Mumbai: Oil-to-yarn and retail conglomerate Reliance Industries Ltd (RIL) has won two hydrocarbon blocks in Myanmar for exploration, the company said on Wednesday.

Myanmar is the latest country where RIL is seeking to expand its upstream oil and gas business into, after testing the waters in nations such as Venezuela and Iraq.

RIL indicated it may be looking to expand more aggressively in international markets due to the better hydrocarbon potential that some of these countries hold, and to mitigate the policy risks faced in India.

“RIL’s participation (in bidding for oil and gas blocks in Myanmar) is in line with its strategy of portfolio rationalization by expanding its international asset base by investing in regimes that have attractive internationally competitive terms on offer," RIL said in its statement issued after market hours.

“The company thus hopes to leverage its organizational capabilities and expertise to create value for the E&P (exploration and production) segment," it said.

The Mukesh Ambani-led company had applied for three blocks through the Myanmar Offshore Block Bidding Round, 2013, the company said, and won approval for two blocks. According to the process, RIL will sign production-sharing contracts for the offshore blocks, which allows for initial preparation and study periods before committing to exploration.

An RIL official, speaking on condition of anonymity, said the company will get more aggressive in expanding its energy business globally.

RIL had earlier said it was looking at joint venture possibilities in oil and gas exploration and production in Venezuela. The company was also shortlisted last year for developing the Nasiriya oil field in Iraq and an associated 300,000 barrels per day refinery.

“Some of the other countries that we are looking at offer better political stability and since we have streamlined our hydrocarbons portfolio in India to six blocks from around 45 earlier, there is greater scope to do so (expand internationally)," the RIL executive said.

Niraj Mansingka, an oil and gas sector analyst at Edelweiss Securities Ltd, said India is a “complicated market" for oil and gas companies to do business in, with a lot of uncertainty in policies, and therefore it may be easier for companies to do business outside India.

“The root cause is that mechanisms like the National Exploration Licensing Policy did not evolve for a very long time. Though there have been a lot of positive policy changes in the last few months, not enough time has gone by to set a precedence of business becoming easier," Mansingka said. “Also, one of the biggest factors is that the hydrocarbon potential itself is much better in some other countries like those in Africa, than in India."

RIL has been facing intense pressure from regulatory authorities and certain political sections over its oil and gas business, which mainly comprises the D6 gas reservoir in the Krishna-Godavari basin, off the eastern coast of India.

Since natural gas production from the field began declining, parties such as the Communist Party of India (CPI) have accused the company of hoarding the gas till prices become more remunerative. The Aam Aadmi Party (AAP) also recently alleged that the government’s decision to hike gas prices, which was scheduled to come into effect from 1 April, was taken to benefit private companies such as RIL.

The gas price hike has been deferred until after the general election that ends in May, following an order by the Election Commission.

The last reported production from RIL’s D6 reservoir stood at 13.28 million standard cubic meter per day (mscmd) as against a peak of 69.43 mscmd in March 2010.

“It will be like axing your own feet, if owing to a difficult business environment, companies like RIL start focusing more outside the country. Global oil and gas firms are already not too keen on India, and Oil and Natural Gas Corp. Ltd alone hasn’t done enough to explore all the energy potential that India has," said S.P. Tulsian, a Mumbai-based independent stock market analyst.

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