Reliance Petroleum Limited (“RPL”) has announced that its 580 KBPSD export oriented refinery, coming up in a Special Economic Zone at Jamnagar, is progressing as per schedule and is well on its way towards its scheduled completion by December 2008.
The Project has achieved significant progress on various fronts including engineering, procurement, construction and statutory approvals.
Highlights of key developments during the quarter are as follows:
• SEZ approvals received
• Basic engineering nearly completed
• Major purchase commitments made; All long-lead and critical equipments ordered
• Construction work begun and progressing rapidly and infrastructure readiness achieved
• More than 30,000 people working on the Project across locations globally
During the quarter, RPL received necessary approvals for setting up the Project as a unit in the SEZ at Jamnagar. The Company has also received environmental and other statutory approvals required for the Project.
The Company has achieved excellent engineering progress during the quarter. The basic engineering work is nearly complete and detailed engineering work is progressing as per schedule at various offices, seamlessly connected across the globe.
The Project has made significant progress on the procurement front. All long-lead and critical equipments as well as various bulk items have been ordered. Their deliveries have also begun at the site. The Company has made rapid progress on the infrastructure development and construction as well. The work front for several critical activities has been released and site grading is nearly complete. The road development as well civil works are in full swing.
During the last quarter, The Company has successfully completed its equity financing through an initial public offering, which received an unprecedented response from domestic and international investors and created several new records in the history of the Indian capital markets. RPL has also made significant progress on the debt funding of the Project and is working with a consortium of banks for raising syndicated loans of US$1.5 billion.
This quarter also marks the significant development of RPL’s strategic alliance with Chevron Corporation, USA. Chevron India Holdings, an indirect subsidiary of Chevron Corporation, purchased 225 million shares representing 5% of equity capital in RPL from Reliance Industries. Mr Jeet S Bindra, President of Chevron Global Refining has joined the Board of Directors of Reliance Petroleum with immediate effect.
RPL believes that the strategic relationship will benefit the Company as it will be able to leverage the combined strengths of RIL and Chevron in several areas. Chevron Corporation is the 5th largest integrated energy company in the World with operations spread across 180 countries and refining capacity of over 2 million barrels of crude oil per day.
Looking ahead, the global refining industry fundamentals continue to stay robust. Despite high crude prices, demand for petroleum products demonstrated strong resilience and reinforce confidence on the long term prospects. New capacities are lagging behind due to project delays
and cancellations. Limited additions to the global conversion capacity and widening light heavy differentials indicate that the complex margins would remain stronger even in the future.
Commenting on the progress Mr Mukesh Ambani, Chairman of Reliance Petroleum Ltd said “We are delighted with the unprecedented response to RPL’s IPO. Our source of inspiration is the trust that over a million shareholders have reposed in us.
I am encouraged by the significant progress achieved by RPL on various fronts during the quarter. The refinery project has taken-off in full swing and is well on its way towards its scheduled completion by December 2008. RPL’s world-scale, complex refinery is well poised to capitalise on the opportunities unfolding in the global refining scenario towards creation of superior and sustainable value for our shareholders.”
