Diversification of Reliance Industries

Reliance Industries Ltd. Friday said it will get into the electricity business and re-enter telecommunications as it sets out to diversify after the recent scrapping of a noncompete pact between its billionaire founder, Mukesh Ambani, and his younger brother, Anil.

Addressing an annual meeting of shareholders, Mukesh Ambani, the world's fourth-richest man, said Reliance Industries will continue to invest in the development of shale gas in North America as part of its strategy to become a significant player in the business.

The brothers in May scrapped a non-compete agreement signed in January 2006 when they split the business empire of their late father, Dhirubhai Ambani.

Under the family settlement, the telecom venture--now known as Reliance Communications Ltd.--was given to Anil Ambani, along with the power and financial services businesses. Mukesh Ambani retained Reliance Industries, which has interests in oil and gas, petrochemicals, textiles and retail.

The scrapping of the pact opened sectors such as power, financial services and telecommunications to Reliance Industries, India's largest company by market capitalization and its largest natural-gas producer.

In April, Reliance said it would spend $1.7 billion for a 40% stake in a joint venture with Atlas Energy Inc., a company that has operations in the Marcellus Shale, a large natural gas-rich rock formation under Pennsylvania, New York and other states.

The company is also considering stake buys in Texas-based oil and gas producer Pioneer Natural Resources and Pennsylvania-based East Resources Inc., according to local media reports.

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