THE WALL STREET JOURNAL
DECEMBER 18, 2009, 6:31 A.M. ET
By SUNIL RAGHU
NEW DELHI — Shell India Ltd. plans to expand “aggressively” as it keeps pace with accelerating fuel consumption in the world’s second-fastest-growing economy, Shell India Chairman Vikram Singh Mehta said Friday.
Fuel demand has been rising over last three months in India due to increased automotive consumption, driving optimism among energy companies in the country.
“As a company we are the largest and most diversified of the energy multinationals in India and our plan going forward is to grow this business aggressively and make eventually sizeable contribution to Royal Dutch Shell group worldwide,” Mr. Mehta said on the sidelines of an industry conference.
The group has invested over a billion dollars in India since re-entering the market in 1994, Mr. Mehta said, adding that the upcoming expansion won’t necessarily lead to any big-ticket investment dollars flowing into the country.
“You aggressively expand on the foundations you have laid, he said. “Don’t put new money in building factories. You already have the factories. You just expand.”
Domestic oil product sales in October, an indicator of economic growth, rose 17.3% to 11.47 million metric tons.
Mr. Mehta said that group’s liquefied natural gas receiving terminal in Hazira on India’s west coast was operating at “close to 100% capacity,” despite that addition of new domestic capacity.
Reliance Industries Ltd. is ramping up production at its Krishna Godavari D6 basin off India’s east coast after starting production in April, with current output around 50.3 million metric standard cubic meters a day.
“The Reliance factor has not affected us yet. The market is large enough for us to absorb both LNG as well as domestic gas,” Mr. Mehta said.
Write to Sunil Raghu at [email protected]
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