Ambani brothers may unite over coal-bed methane project

Mukesh Ambani's Reliance Industries Ltd and brother Anil's Reliance Power Ltd have held initial talks to jointly develop their adjoining coal-bed methane (CBM) blocks in Madhya Pradesh, giving the estranged brothers another opportunity to mend forces, according to a report.

Executives of RIL and Reliance Power confirmed that the two companies had initiated discussions a few months ago to optimise costs by developing common infrastructure at the contiguous CBM blocks, says The Economic Times. But talks were preliminary and so far they have not made significant headway, they said.

Cash-rich Reliance Industries, which has the skills to drill on land and in the deep sea, is scheduled to start production from its Sohagpur CBM block in 2012-13 and is locked in a dispute with the oil ministry over CBM pricing.

It does not want to talk about a potential collaboration. "We will not offer any comments," a spokesman said.

Reliance Power said it was generally open to cooperation. "The company always evaluates possibilities of cooperation with other organisations in the zone of our investment area for expeditious execution of our projects," it said in response to a specific query from ET on cooperation in CBM with RIL.

The Ambani brothers, who fought an acrimonious, public battle after they divided the business empire, had issued a joint statement in May 2010 saying they had cancelled non-compete arrangements between them and hoped to create "an overall environment of harmony, cooperation and collaboration between the two groups".

Industry officials say that compared to the telecommunications sector that has a grand, countrywide operation, CBM, which involves commercial extraction of methane gas trapped in coal deposits, is a new and relatively small business.

Companies such as RIL have opposed the government's move to tightly control CBM sales and pricing, according to the report.