RIL in running for JV with US's Atlas Energy

RELATED NEWS Reliance Industries eyes three US shale gas assets: Sources Reliance out of race for Canadian firm ALSO READ See latest News about Reliance See previous management interviews See what other Experts & Brokerages are saying about Reliance

Indian energy major Reliance Industries is seeking a joint venture with Atlas Energy to develop the US firm's Marcellus Shale gas operations, a source with direct knowledge of the matter said.

Independent oil and gas company Atlas is seeking a partner for its operations in the booming Marcellus Shale in the eastern United States, sources told Reuters last month.

The company's core Marcellus position consists of 266,000 acres largely in southwestern Pennsylvania. The Marcellus Shale, which spans parts of Pennsylvania, West Virginia and New York, could hold enough natural gas to satisfy US demand for a decade, according to some geologists.

Reliance's move comes on the heels of two failed attempts at taking over foreign firms. Bankrupt petrochemicals firm LyondellBasell recently rejected a bid from Reliance, India's largest listed firm, that valued the target at about USD 14.5 billion.

Reliance, controlled by the world's fourth-richest man, Mukesh Ambani, also lost a race for Canadian oil sands firm Value Creation, in which the Indian firm wanted to take a majority stake for USD 2 billion.

It was not clear how much the joint venture for the Marcellus Shale would bring in for Atlas.

In a similar deal, Japan's Mitsui & Co Ltd paid USD 1.4 billion to become a joint venture partner with Anadarko Petroleum Co in the Marcellus. In 2008, Chesapeake Energy Corp sold 32.5% of its holdings in the project to Norway's Statoil for USD 3.375 billion.

Reliance has raised USD 2 billion by selling stock in recent months, a warchest it could put to use for its ambitious overseas plans.

The company in late 2008 commissioned a new 580,000 barrel per day (bpd) refinery next to its 660,000 bpd facility in the western Indian state of Gujarat, creating the world's single-largest refining complex.

Analysts have said the company will look to target oil and gas assets overseas to feed this refinery.

Reliance declined to comment. Atlas could not be immediately reached for a comment.