Posted on 06/27/2006 9:37:08 PM PDT by CarrotAndStick
A new Indian partner of San Ramon-based Chevron Corp. is planning to build the world's largest oil refinery. Reliance Industries Ltd. plans to become a global player in the energy market, the company's chairman said today. The Indian company plans to spend US$6.1 billion on the new refinery, which will be built alongside its existing refinery in the western Indian town of Jamnagar. Together, the two refineries will have a capacity to process 1.24 million barrels of crude oil per day, making Jamnagar the world's largest petroleum refining hub, Reliance Chairman Mukesh Ambani told an annual shareholders' meeting in Bombay. Chevron has invested $300 million for a 5 percent stake in the Reliance subsidiary that is building the new refinery. Chevron has an option to increase its stake to 29 percent. Chevron shares are up 49 cents, or 0.8 percent, at $60.17.
(Excerpt) Read more at mercurynews.com ...
Reliance to invest $5.6 bln in retail Tue Jun 27, 2006 5:33 PM IST
MUMBAI (Reuters) - India's top petrochemicals firm Reliance Industries Ltd. said on Tuesday it would invest $5.6 billion in retail, a move analysts say will give it a head start over foreign firms eyeing the $6 billion market.
Chairman Mukesh Ambani said Reliance had set up a subsidiary, Reliance Retail Ltd., with equity capital of $2.24 billion, which would sell everything from food to clothes to travel services in a mixture of convenience stores and supermarkets around the country.
Reliance, which has a market value of more than $29 billion, has announced a series of investments in recent months including a $6 billion refining joint venture with Chevron in India and $5.9 billion in infrastructure projects in the north and east of the country.
"Organised retailing would be an overarching theme of the expansion and growth of Reliance in the near-term future," Ambani told shareholders.
Nagarajan Narasimhan at research firm CRIS INFAC said: "Money talks, and with such a huge cash flow, Reliance can make anything happen."
The company's shares gave up most of their initial gains to end 0.4 percent up at 985.55 rupees in a firm Mumbai market, while shares in India's largest retailer, Pantaloon Retail (India), fell 6.5 percent after Reliance's announcement.
FOREIGN COMPETITION
After an acrimonious separation of the Ambani family group a year ago, Reliance Industries, which is controlled by Mukesh, now aims to be a refining-to-supermarkets conglomerate and announced an initial $750 million spend in retail in January.
Younger brother Anil controls Reliance Communication Ventures Ltd., Reliance Capital Ltd. and Reliance Energy Ltd. and is also charting an aggressive growth plan in infrastructure and telecommunications.
Morgan Stanley said in a research report that Mukesh's company was likely to emerge as a key player in organised retail.
"Reliance will be able to capitalise on this opportunity and gain a clear head start ahead of imminent foreign competition entering India," the report said.
It estimated organised retail in India would grow to more than $60 billion by 2015, while CRIS INFAC expected it to reach $24 billion by 2010.
Foreign firms like Wal-Mart Stores Inc are itching to get into India, where organised retail chains control only about 3 percent of the market.
Multiple-brand retailers can only set up wholesale or franchise operations, but in January India allowed single-brand foreign retailers to take 51 percent in local joint ventures.
The rules are expected to ease over the next two years, and Pantaloon Retail has said it is rushing to expand before more foreigners are allowed in.
Bharti Enterprises, which partly owns top mobile services provider Bharti Airtel, is in talks with Britain's Tesco Plc, Wal-Mart and France's Carrefour and expects to finalise a partner in a few months.
STARTING WITH LAND
CRIS INFAC's Narasimhan said land acquisition was the only capital-intensive part of organised retail and expected Reliance to invest a significant portion of its billions of dollars in land across India.
"Because of the size, large corporates like Reliance have an advantage to provide better infrastructure," Narasimhan said.
Reliance proposes acquiring up to 10,000 hectares of land in the northern state of Haryana alone and is eyeing much more as it extends its reach across 1,500 Indian towns and cities.
As far as existing business was concerned, Reliance had discovered oil in its exploration block in the Krishna Godavari basin off India's east coast, where it has already found the country's largest gas field, Ambani said. "This discovery signifies a large geological play that could result in future discoveries," he said.
The company, which operates India's biggest refinery, had also created 1,218 retail fuel outlets in two years, he said.
(Additional reporting by Prashant Mehra and Krittivas Mukherjee)
© Reuters 2006. All Rights Reserved.
Meanwhile, back here in the U.S., where Lex Luther and the Dims have our domestic energy hostage...
You got that right.
Together, the two refineries will have a capacity to process 1.24 million barrels of crude oil per day, making Jamnagar the world's largest terrorist target.
May as well be in India. Of course, I'd prefer the US West Coast, but some meaningless soil might be slightly affected, and we can't have that.
Sigh.
Seriously, though, India has the infrastructure and, um, "assets" to defend the thing. They despise the radical Islamic world, arguably as much as we do. Economics recognizes no theology.
My aunt lives next to the largest oil refinery on the east coast. Neither her, nor my cousin (who grew up there) has developed a hand growing out of their head, although it does SMELL bad down there!
1.24 MBD
I believe Chevron El Segundo is the largest refinery on the west coast and it tops out at about 400,000 BPD, or about one third the size of this planned monster.
You could not combine any three refineries in the west and match the size of this one.
The required real estate alone would make it prohibitively expensive.
Making Jamnagar the largest exporter of gasoline to Iran.
yitbos
for what ? The fuel is needed in asia. No need to build such a refinery in the USA since there ain't much growth predicted in car sales.
Saw John Hofmeister, President of Shell Oil, on CNBC yesterday being interviewed at the US/Mid-East Oil conference being held in Houston. He said it was not in the best interest of the US to be energy independent because we should trade with other countries. I guess he's afraid of all those corn and soybean growers in our Mid-west who are opening ethanol refineries every week, after Big Oil was content to sit on its hands and not build one refinery in 30 years, using lack of refineries as a convenient excuse to run up the prices for US consumers. I hope Big Oil goes broke in the future and takes the Saudis, Venezula, Mexico etc. etc. down with them. What a collection of thieves.
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