Reliance hires advisors to explore Atlas options

Mukesh Ambani, chairman of Indian energy major Reliance Industries, arrives to address the annual shareholders meeting in Mumbai June 18, 2010. Reliance Industries might challenge Chevron's bid for Atlas Energy, according to a letter disclosed by the U.S. natural gas producer in a filing with the regulators.

MUMBAI (Reuters) - Reliance Industries Ltd might challenge Chevron Corp's bid for Atlas Energy Inc, according to a letter disclosed by the U.S. natural gas producer in a filing with U.S. regulators.

"We believe Reliance, as Atlas Energy's joint venture partner and a company with substantial financial resources, would have been the most natural and obvious potential transaction partner for Atlas Energy," the Reliance letter said.

The Indian energy major, controlled by Mukesh Ambani, the world's fourth-richest man with a $29 billion fortune according to Forbes magazine, said it had hired Perella Weinberg Partners and Kirkland & Ellis to evaluate its options.

Last April, Reliance agreed to pay Atlas $1.7 billion to form a joint venture and own 40 percent of Atlas's Marcellus Shale operations in the eastern United States.

In November, Chevron then announced plans to buy Atlas for $3.2 billion.

Reliance said in the letter, filed by Atlas with the U.S. Securities and Exchange Commission on Tuesday, that it would like to evaluate options including whether it could be able to "create incremental value" for Atlas.

The Reliance letter said at no time during the seven months of Atlas's discussions with Chevron did Atlas reach out to the Indian company to gauge its interest in a "possible company-level transaction."

"We were very surprised by the announcement of your deal to be acquired by Chevron," Reliance told Atlas in the letter.

Reliance said in the joint venture negotiations it was assured the Indian company would be the "preferred partner" should Atlas choose to pursue a whole-company transaction.

A Reliance spokesman in India declined to comment on the development when reached by Reuters on Thursday.

Also in the SEC filing was a response to Reliance from Atlas Chief Executive Edward Cohen, who wrote that it was fully committed to the joint venture. Atlas had not heard anything further from Reliance on the matter, Atlas said.

The Reliance letter said Chevron's deal valued the Marcellus assets at a significant discount to the value attributed to them in the joint venture with Reliance.

Reliance has invested in areas such as shale gas as it seeks a foothold overseas and to expand its interests beyond petrochemicals, refining, conventional oil and gas exploration, and retail.

Chevron declined to comment on Reliance's letter, but noted Atlas stockholders would meet in Philadelphia on Feb. 16 to vote on the deal.

"Chevron believes this is an attractive transaction for Atlas shareholders which Chevron looks forward to completing," said Lloyd Avram, a spokesman in San Ramon, California.

Chevron and Reliance have a history, including a 5 percent stake in Jamnagar, the world's largest refinery complex, which Chevron ultimately sold back to Reliance in 2009.

(Reporting by Indulal P.M. and Sumeet Chatterjee in Mumbai, with additional reporting by Braden Reddall in San Francisco; Editing by David Cowell, Bernard Orr)