Reliance in talks with Chevron for tie up

Jamnagar, Mar 30 (UNI) Mukesh Ambani-led Reliance Industries Ltd is in talks with US energy major Chevron for possible cooperation in RIL's new 29 million tonne a year refinery at Jamnagar in Gujarat.

California-based Chevron Corp is the world's fifth largest integrated energy company. This will be the first foreign direct investment (FDI) by a global oil major in India's booming refining sector.

Earlier this month, UK-based BP Plc backed out of its commitment to buy equity in HPCL's Bhatinda refinery.

In lieu of a stake in its Rs 27,000 crore plus refinery venture, RIL will seek assurance from the proposed strategic investor in two key areas - crude supplies for its export-oriented refinery and confirmed off-take of petroleum products for the overseas markets.

According to sources, RIL chairman Mukesh Ambani is currently in the US meeting top executives of Chevron for a possible pact.

The new refinery will be set up on a Special Economic Zone (SEZ) and will cater to the export needs only, Executive Director, RIL, Hital R Meswani said.

With the commissioning of the new facility in 2008, the combined production capacity of Reliance group would reach 1.25 million barrels per day (bpd), making it the world's largest refinery.

The present Jamnagar refinery has a production capacity of 6.6 lakh bpd.

The decision to set up an export-oriented refinery came as India now boosts of export surplus in petroleum products, and to capture the market abroad as a shortage in refining capacity in the United States and Europe looms large, they said.

Reliance Industries is exporting petroleum products to 50 countries across the world. The existing refinery was also floated by Reliance Petroleum Ltd, which was later merged with the main company RIL several years back.

Reliance Petroleum Ltd (RPL) would be floated by RIL, which would hold 80 per cent stake in the company while RIL would provide support to RPL in the form of crude sourcing and risk management.

UNI RT SR DS1550