Reliance to Set Up Unit to Invest in Shale Gas
An official announcement of this venture is likely to be made on June 3rd at the company's annual general meeting.
SPV's are subsidiary company's established corporations who want to finance a large project without putting the entire firm at tremendous risk. It makes transactions more tax efficient and diffuses risk from the parent company.
For Reliance Industries, this move is a deviation from its known tactics of operation when it comes to a big project. Nevertheless, the effort to structure its new line of business - shale gas – in a new way may prove beneficial after all. Reliance will reportedly make an initial investment of $1.5 -2 billion. The transaction would require the permission of the Reserve Bank of India for the proposed vehicle.
Source: The Ground Report India
Carrizo Oil & Gas
Pioneer Natural Resources