Chevron to buy 5 pc stake in Reliance Petroleum for $ 300 mn

Mumbai, Apr 12 (UNI) Chevron India Holdings Pte Ltd, Singapore has decided to buy a 5 per cent stake in Reliance Petroleum (RPL) for 300 million U S dollars subject to approvals from regulatory authorities.

The agreement to this effect was announced here today by Mukesh Ambani-led Reliance Industries (RIL) and Chevron Corporation.

RPL, which is setting up a 27,000-crore refinery at Jamnagar in Gujarat, is a 100 per cent subsidiary of RIL, whille Chevron India Holdings is a wholly-owned subsidiary of Chevron Corporation.

The agreement provides Chevron with the right to acquire an additional 24 per cent of the equity stake in RPL on conclusion of the collaboration agreements between Chevron and Reliance. If Chevron acquires the additional equity, this will rank as one of the largest investments from any multinational company in a single project in India, market sources said, adding this will also be one of the largest foreign direct investment (FDI) in India.

Chevron's decision to acquire an equity stake in the refinery project is a reaffirmation of Reliance's strengths in project execution and commissioning as also the company's talented human reservoir. This also heralds India's entry into the league of being a major player in the refinery sector in the world.

Besides this agreement, Reliance has also signed two Memoranda of Understanding with Chevron. The first MoU sets out the principles of partnership by which Reliance and Chevron plan to optimise the crude supply and product offtake and marketing of the RPL refinery.

Under this MOU, Reliance and Chevron will jointly evaluate application of mutually selected refinery technology. It also envisages that the parties would cooperate towards setting up a technology development centre in India.

The second MoU sets out the intent of both companies to collaborate in other areas in the energy value chain, thus establishing a significant foreign collaboration in the refinery sector in India.

UNI SA AW2044