Chevron Invests to Acquire Position in Jamnagar Export Refinery

Chevron Corporation says it will spend approximately $300 million to purchase five percent of Reliance Petroleum Limited (RPL), a company formed by Reliance Industries Limited (Reliance) to own and operate a new export refinery being constructed in Jamnagar, India. RPL plans to commence an initial public offering (IPO) with the net offering to the public of 10 percent of the company from April 13, 2006 until April 20, 2006.

RPL plans to develop a 580,000 barrels per day crude capacity refinery, which is expected to begin operation in December 2008. Chevron has future rights to purchase additional shares to increase its equity ownership to 29 percent.

In addition, Chevron announced the signing of two Memoranda of Understanding with Reliance. These cover the principles by which Reliance and Chevron will seek to optimize the refinery crude supply and product marketing and set out the intent of both companies to pursue other collaboration opportunities in the energy value chain.

"We are very pleased to have forged this relationship with Reliance, one of India's leading companies, which has excelled in the execution of world class projects. This underscores the importance of Asia to Chevron generally, and India specifically. I look forward to working with Reliance in the development of the new refinery and jointly pursuing additional opportunities," said Chevron Chairman and CEO Dave O'Reilly. Reliance currently operates a 650,000 barrels per day refinery in Jamnagar. The new refinery is designed to have a similar throughput capacity, but is expected to process heavier crude oil. The new refinery would be the world's sixth largest refinery on a single site, and the two together would constitute the largest refinery complex in the world, based on current capacities.

"It is our strategy to continue to increase our refining flexibility and scale to meet growing global demand and this new plant at Jamnagar will increase our ability to process a wide variety of hard-to-refine crudes. We intend to use our world-wide trading capability to source crude and place refined products for the new refinery," said Jeet Bindra, president, Chevron Global Refining.

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Posted 17/04/06

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