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What will Chevron do in Reliance Petroleum Limited?

Submitted by TheIndiaStreet on December 20, 2007 - 3:58pm.
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By Vipin Agnihotri

When completed, Reliance Petroleum Limited is going to be Asia’s biggest refinery but at present it is in construction phase. Despite all this, for the last one year, Reliance Petroleum Limited has been one of the most buzzing stocks in the Indian market.

It is worth mentioning in this regard that stock of Reliance Petroleum Limited has provided return of more than 200 per cent over the last year. Albeit in the recent past, from its all time high of Rs 295, the stock has fallen by more than 30 per cent.

Lots of experts believe that the US oil major Chevron, which presently owns 5 per cent in Reliance Petroleum Limited, may sell its stake. According to sources, Chevron is evaluating all the options available at hand. Not so long ago, Reliance Industries Limited sold as much as 4.01 per cent equity in Reliance Petroleum Limited for an average price of Rs 223, totaling little over Rs 40 billion.

Post equity trade, Reliance Industries Limited’s holding in Reliance Petroleum Limited has come down to a level of 70.99 per cent. Point to be noted here is that the deal has enhanced Reliance Petroleum Limited’s shareholder base considerably and this will give respite to investors. Interestingly, there was not even a single bulk deal in the complete stake off-loading processing.

Moreover, there is a buzz that further off-loading of 0.9 per cent is on the cards. Now with Reliance Industries Limited off-loading 5 per cent, Chevron cannot acquire 29 per cent stake in total from Reliance Industries Limited since Reliance Industries Limited won’t like to bring its shareholding in Reliance Petroleum Limited to a level less than 51 per cent. Taking this into consideration, the other option is to buy a 20 per cent in total from Reliance Industries Limited and rest from the market or make an exit. What will Chevron ultimately opt is a pivotal question.

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very true... just when he

Submitted by Anonymous (not verified) on March 21, 2008 - 10:06am.
very true... just when he assured his investors in the statement in july 2007 that the growth was sustainable and likely to continue for the next few decades(or did he mean months as he sold his 4% stake within a few month of making this statement). i dont think any body believes the humbug about increasing shareholders base. how can mr ambani think he is increasing base by reducing the value of his own stock. i can be very certain that is not just 4% that he sold off. he must have gone short on the futures side also as he very well knows that no bodyelse has the power to manupulate his stock. anyways now the poor retail investor can be certain that he will not see his price for a quite some time even if the refinary kicks off sooner..

Reliance knows that they are

Submitted by Anonymous (not verified) on February 20, 2008 - 5:48am.
Reliance knows that they are screwed.They might have the biggest refinery but where is the oil?Without chevron they are fucked.All their talk of making major gas and oil discovery in KG basin is hog wash.Who audits those claims?In the international oil market everyone knows that deepwater oil wells are the most difficult and non productive.And chevron realised that and sold their stake.Reliance says they have something going in yemen.and output is 2000 barrels a day?who are they trying to fool?What is 2000barrels?Oil experts will tell you its nothing.zilch.And then they say they have something going in some other obscure place in the middle east.To make matters worse,they tried to make a secret and illegal deal with the local govt in kurdistan.They got caught and are banned from doing anything in Iraq.Dont forget that reliance's name also figured in the oil for food scam at the UN.These guys (reliance) are desperate now.They got into retail and other non-specific fields and failed.Why would a group like reilance get into chindi things like selling bhaji?Wonder which oil major has got into selling bhaji?.it must be a world first.Lastly,and most importantly,no major oil company applied for any block in NELP 6.Why?Because there are no major oil reserves left in the world.They have done all the research and study into this siesmic and geothermal study.They are not intrested in this cock and bull story of huge reserves in india.Dont forget the govt allowed 100% foreign equity ownership in NELP 6.What is needed is that someone needs to audit reliance and all its claims of oil and gas discovery.The hammer is about to fall.Get out while you can.