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Last Updated: Wednesday, 3 August, 2005, 12:19 GMT 13:19 UK
Reliance plans huge oil expansion
Chairman Reliance Industries Mukesh Ambani speaks at the company's annual general meeting
Mukesh Ambani: Reliance is becoming a global oil and gas player
Indian industrial giant Reliance has announced that it will spend $5.8bn to create one of the world's largest oil refineries in Gujarat state.

Reliance chairman Mukesh Ambani said capacity at its Jamnagar refinery would be doubled to 60m tons per year.

Indian shares reached a record high for the seventh straight day on the news.

The announcement comes after a bitter seven-month ownership feud between Mukhesh and his brother, Anil, which was resolved in June.

The increased output is primarily aimed at the international market.

'World class'

The expansion programme will take three years, after which Jamnagar will become the largest refinery of its type at a single location.

Reliance has one of the most aggressive exploration programmes in deep waters in the world
Reliance chairman Mukhesh Ambani

"A world-class petroleum refinery and retailing business, combined with sizeable oil and gas assets, enables Reliance to chart a course, a path to becoming a global hydrocarbon major while addressing India's energy security needs," Mr Ambani told shareholders at the company's annual general meeting.

He also said that Reliance was planning to aggressively build its off-shore oil and gas exploration programmes.

"Exploration and production of oil and gas has the potential to be the most valuable business of Reliance Industries," he said.

He said his company had made 10 oil and gas discoveries in the last year.

Shares rise

Under the terms of June settlement, Mukesh Ambani controls the oil, gas and petrochemicals business while Anil Ambani oversees telecoms, electricity and the group's finance arm.

Indian stock brokers in Bombay
Share prices rose after the annoucements

On Wednesday, the brothers said that details of the split were being worked out to include any changes affecting shareholders.

The Ambanis own about one-third of Reliance, which is worth about 12% of the Bombay Stock Exchange.

The benchmark Bombay Stock Exchange index closed at 7,756.47 points, marginally higher than the previous days trading.

"Trading interest was strong due to the Reliance Industries announcements," broker Manoj Kakaiya was qutoed as saying by AFP.

"With the Sensex closing positive, we expect buying momentum to continue throughout the week," he added.

Reliance was founded 46 years ago by one of India's most famous entrepreneurs, Dhirubhai Ambani, to trade in polyester yarn.

Dhirubhai Ambani died intestate in July 2002, leaving the brothers to battle for control of a massive conglomerate that spans numerous industrial sectors.

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