Reliance Industries (RIL) will displace US energy major Chevron Corp to become the 13th largest oil refining company in the world after its board approved plans to absorb its Reliance Petroleum unit.
RIL, the nation's largest listed firm, will issue one share for every 16 held in RPL, giving it direct control of the world's largest refinery complex.
The company's 33 million tons only-for-export refinery at Jamnagar together with adjacent 29 million tons SEZ refinery of RPL would make it the largest refining company in India. It displaced state-owned Indian Oil Corporation (IOC) with 50.7 million tons refining capacity. IOC was ranked 18th on the world list.
Also read: Reliance, RPL announce 1:16 merger ratio
The 1.24 million barrels per day refining capacity made the port city of Jamnagar in Gujarat the single largest refining hub in the world.
In the list of world's largest refining companies, RIL would replace Chevron to become the 13th largest firm. Chevron has refining capacity of just over 61 million tons.
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The list is lead by Exxon Mobil with a massive 268 million tons of refining capacity followed by Sinopec of China with 210 million tons of refining capacity. PetroChina with 130 million tons a year capacity is at 7th position.
Prior to the merger, RIL will also buyout Chevron's five per cent holding in RPL at Rs 60 a share. Chevron had invested in RPL in April 2006 to have a refining base in South Asia.
Before the merger, RIL did not find a mention in the list
of the world's top 25 companies by refining capacity. IOC was the only Indian firm in the list and after the entry of RIL, the state-run company would drop one position to the 19th.
Iranian national oil firm National Iranian Oil Company is a step ahead of RIL on the world list with 83 million tons a year refining capacity.
Royal Dutch Shell (199.25 million tons) is ranked third in the world, followed by BP (161.6 million tons) and ConocoPhilips (140 million tons).
Saudi Aramco of Saudi Arabia is ranked at 9th position with just over 100 million tons a year of refining capacity. Total of France is at 10th position with 85.3 million tons capacity.
RPL commissioned the world-class refinery in the special economic zone (SEZ) in late December and is targeting markets in the US and North America besides western Europe for the Euro-IV and V grade gasoline and diesel it would produce.
The merged company would benefit from lower operating costs, Reliance said.