The Hindu : Business : Chevron to pick up 5 p.c. in RPL

Online edition of India's National Newspaper
Thursday, Apr 13, 2006

Business

Business

Chevron to pick up 5 p.c. in RPL

First major FDI amounting to $300 m in refining sector

MUMBAI: Mukesh Ambani-controlled Reliance Industries on Wednesday announced that U.S. energy major Chevron would pick up five per cent stake in Reliance Petroleum Ltd. for $300 million (about Rs. 1,350 crore), representing the first major infusion of foreign direct investment (FDI) in the country's robust refining sector.

The investment, subject to approvals from the regulatory authorities, will be made by Chevron India Holdings Pte Ltd., Singapore, a wholly-owned subsidiary of Chevron Corporation, RIL informed the Bombay Stock Exchange.

The announcement comes a day ahead of the opening of RPL's IPO to raise nearly Rs. 8,370 crore.

RPL, a subsidiary of Reliance Industries, is building a Rs. 27,000-crore refinery in Jamnagar in Gujarat.

Announcing the agreement, under which Chevron would pick five up a per cent stake in RPL, and signing of two other MoUs, RIL Chairman and Managing Director Mukesh Ambani said: ``The agreement and MoUs between Chevron and Reliance will be the first step in establishing a strong partnership with one of the world's largest and most respected companies.''

The agreement provides Chevron an option to increase the equity stake in RPL to 29 per cent. Of the two MoUs, the first sets out the principles of partnership by which RPL and Chevron plan to optimise the crude supply and product offtake and marketing. Besides, RPL and Chevron would jointly evaluate application of mutually selected refinery technology.

The other MoU envisages cooperation between the two to set up a technology development centre in the country. Chevron has recognised the inherent strengths of India in the energy sector, Mr. Ambani said. "We are very pleased to have forged this relationship with Reliance... This underscores the importance of Asia and especially of India to Chevron,'' Chevron Chairman and Chief Executive Office Dave O'Reilly said in a joint statement issued by RIL. — PTI

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