RIL, Chevron weigh fuel retail outlets in E Europe

NEW DELHI: Having tied the knot in the refinery space, the two oil majors — The duo are exploring Reliance Industries (RIL) and Chevron — are now planning to move on to the retail fuel market. options of setting up retail outlets in the East European and African markets which are rich in crude oil but have to depend on imported products to meet their demand.

Most of the African nations, which are oil-rich, lack basic infrastructure like refineries and pipelines. RIL and Chevron, which had planned to expand their partnership in other related areas in the hydrocarbon chain, see this as a natural extension of their business.

While higher grades of petrol and other auto fuels from the new refinery at Jamnagar are expected to be exported to the US markets where it would be sold at the Chevron retail markets, part of the fuel produced at the existing refinery is likely to be marketed in the African and East European markets.

The idea for the duo is to enter new retail markets where neither Chevron nor RIL has any retail play. So, while RIL will continue to be only a bulk supplier for Chevron’s retail market in the US, it will operate its retail outlets in India on its own.

The two will, however, draw up joint retail plans which may include co-branding and co-marketing in the new markets.

Reliance Petroleum, the subsidiary of RIL developing the $6.1-bn new refinery, will have a capacity to process 5,80,000 barrels-a-day, as against its existing refinery under RIL which processes 6,60,000 barrels per day. Put together, the two capacities will be the largest capacity in the world at one site.

RIL’s refinery has a clear lead over other refineries as it is one of the closest refineries to the West Asian countries which continue to be the bulk supplier of crude. While companies like Saudi Aramco which exports large quantities of oil, they are still lagging behind on their refinery plans. Saudi Aramco, which has been planning to develop a refinery, may end up missing the bus to RPL on the time scale.