Chevron Announces Agreements with Reliance to Purchase 5 Percent Stake in India Refinery and Collaborate on Energy Projects
Chevron invests $300 million to acquire position in Jamnagar export refinery with rights to increase stake to 29 percent
SAN RAMON, Calif., April 12, 2006 -- Chevron Corporation (NYSE: CVX) today announced that 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.
Chevron Corporation is one of the world's leading energy companies. With more than 53,000 employees, Chevron subsidiaries conduct business in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing, and distributing fuels and other energy products. Chevron is based in San Ramon, Calif. More information on Chevron is available at www.chevron.com.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
This press release of Chevron Corporation contains forward-looking statements relating to Chevron's operations that are based on management's current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "estimates" and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are the ability of RPL successfully to consummate its initial public offering, the ability of Reliance and the company to negotiate binding commercial agreements pursuant to the memoranda of understanding, the ability of RPL to complete construction of the refinery and other factors set forth under the heading "Risk Factors" in the company's Annual Report on Form 10-K. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Published: April 2006