Reliance to explore tieups with Chevron

David O'Reilly, CEO of US major Chevron, and Mukesh Ambani, chairman of Reliance Industries Ltd, are scheduled to bond on Friday with a slew of proposals for joining hands in areas as different as pumping oil and gas from thousands of metres under the seabed and looking for new ways to make automotive fuel from farm produce. Executives of both companies were mum on the agenda but sources said the meeting could start off with Chevron deciding to raise its stake in Reliance Petroleum Ltd, a Reliance Industries subsidiary that is setting up a 580,000 barrels a day export refinery adjacent to the parent company's existing unit at Jamnagar. Last year, Chevron picked up 5% in Reliance Petroleum for $300 million and is likely to exercise the option in the agreement to raise its stake to 29%. "This will be a nice way to signal that both want to work in other areas outlined in their MoU, including joining hands in upstream (exploration) business... so a partnership in Reliance's gas find in the Krishna-Godavari basin off the Andhra coast is very much on the anvil," a source said. Reliance is scheduled to start pumping from the find and is expected to supply 80 million cubic metres a day of gas at its peak production capacity, which will be more than half of the domestic production. Since gas has to be pumped out from over 2,000 metres below the seabed, Reliance has been hunting for suitable technology which can be supplied by Chevron. This appears a certainty as PM S Prasad, CEO for Reliance's exploration business, will also be present at meeting between Ambani and O'Reilly. Prasad was in the US recently for extended discussions with Chevron executives. One new area the two honchos may explore is biofuels, particularly ethanol. Chevron is the biggest biofuel producer among the world's oil majors and has committed to spend $25 million in research over the next five years at the University of California-Davis to develop renewable fuels from plant waste. Reliance is betting big on ethanol and, as reported first by TOI last year, is looking at acquiring upto 10,000 acres of sugarcane fields in Brazil.
SOURCE : THE TIMES OF INDIA