By OGJ editors
HOUSTON, Apr. 13 -- Chevron Corp. plans to invest $300 million for a 5% interest in Reliance Petroleum Ltd. (RPL), a Reliance Industries Ltd. subsidiary formed to own and operate a refinery under construction in Jamnagar, India.
The 580,000 b/d refinery is to begin operation in December 2008. Reliance now operates a 660,000 b/cd refinery in Jamnagar. The new refinery will be able to process heavier crude oil.
According to Oil & Gas Journal's 2005 Worldwide Refining Survey, the existing Jamnagar refinery is the world's third largest. The new refinery will become the sixth largest.
The addition will move Reliance Petroleum Ltd. to fifth place from eighth place in capacity ranking of refining companies in Asia and enable it to join the OGJ list of the world's 25 largest refiners in 15th place (OGJ, Dec. 19, 2005, p. 60).
Chevron has an option to increase its equity ownership in RPL to 29%. RPL planned an initial public offering of 10% of the company this month.
In addition, Chevron and Reliance signed agreements covering refinery crude supply, product marketing arrangements, and an intent to pursue other collaboration opportunities.
Among other Asian downstream holdings, Chevron holds a 50% interest in the LG-Caltex-Yosu 650,000 b/cd refinery in South Korea.
Other oil companies have explored investing in India's downstream sector, sometimes unsuccessfully.
Last month, BP PLC announced it dropped plans with India's Hindustan Petroleum Corp. Ltd. (HPCL) to form a strategic refining partnership. That partnership would have built a 180,000 b/d refinery at Bhatinda in Punjab, India, that would have cost $3 billion and was to be commissioned in 2009 (OGJ, Oct. 24, 2005, Newsletter).
