Reliance Petroleum makes rapid strides on financing front in Q2

Mumbai, Oct 19 (UNI) Petroleum major Reliance Petroleum Ltd has achieved impressive all-round progress in the implementation of its refinery at Jamnagar and is progressing well towards scheduled completion by December 2008.

During the quarter ended September 30, the company said it had made rapid strides on the financing front. Following its initial public offering that created several new records during the last quarter, the company had successfully obtained commitments of Syndicated Foreign Currency Loan facilities of US dollar 1.5 billion and USD 500 million, which together is the largest foreign currency financing for any single project from India.

In a well-executed global syndication, it had secured commitments of over USD 3.4 billion from over 50 banks across three continents.

This was reflected in an oversubscription of 2.3 times in its initial loan facility of USD 1.5 bn. The company had utilised a part of the excess demand by launching an additional loan facility of USD 500 million, towards meeting a part of the balance debt requirements for the project. The work on balance funding was progressing satisfactorily.

The company had achieved yet another important milestone during the quarter by securing all the required land for the project. The company has now secured the entire land of 1,700 acres at Jamnagar in Gujarat.

Meanwhile, the company had achieved significant progress on various aspects of the project implementation, including engineering, procurement and construction.

During the quarter, the company had clocked substantial progress on the engineering front. While basic engineering was completed, detailed engineering was well on its way to completion. Project activities were being conducted across the globe at various locations, including London, Paris, Montreal, Toronto, Houston and Shanghai. They were conducted across the country at places like Jamnagar, Mumbai and Delhi. All these locations are seamlessly connected to deliver world-class engineering output.

Equally impressive progress had been achieved on the procurement front. The company has placed orders for all long-lead and critical equipment, over dimensional equipment as well as major bulk items.

Shop capacities had been blocked in advance for balance commitments.

Nearly 75 per cent of procurement commitments and contracting activities had been completed and substantial deliveries of various bulk items had also begun at site.

The project has transitioned from its engineering phase to the construction phase successfully during the quarter. Over 230,000 cubic meters of concreting has already been completed and over 100,000 cubic meters of concrete (equivalent to several sky scrappers) was poured every month. The fabrication of steel structures and tankages was making rapid progress.

The company has developed sufficient site infrastructure to put construction on the fast track and is now equipped to receive a peak workforce of over 100,000 people.

Looking beyond, the global refining fundamentals remain intact and promise exciting value creation opportunity for complex refineries.

The continuing shortage of global, refining capacities coupled with tightening product specification, slow growth in desulphurisation capacities and widening light heavy differentials is expected to result in widening demand supply gap for transportation fuels globally. Buoyant outlook for the global economy augurs well for petroleum products demand and reinforces confidence on the long term prospects for the sector.

Commenting on the progress, Reliance Petroleum chairman Mukesh Ambani said, ''I am pleased with the progress achieved by the RPL team on various fronts, including the financial closure and project implementation. The construction activities have taken off smoothly and the project is well on its way towards timely completion. I am convinced that RPL is well positioned to capitalise on the emerging opportunities and create superior value for its shareholders.'' UNI SN SSS SKB1903