Keep your money in fixed deposit - Invest in Reliance Petroleum

Reliance Petroleum has been formed to set up a greenfield petroleum refinery and polypropylene plant to be located in a special economic zone (SEZ) in Jamnagar, Gujarat, Western India. The proposed refinery and polypropylene plant will be located adjacent to the existing refinery and petrochemical complexes of Reliance Industries Limited (RIL). The refinery will have a total atmospheric distillation capacity of approximately 580 kilo barrels of crude oil per stream day and also a 0.9 million tons per annum polypropylene plant. The Company has entered into an agreement with Bechtel France S.A.S (Bechtel) to license the technology for the major process units of the refinery and polypropylene plant. Bechtel will also provide engineering, project management and other construction services for the Company. Reliance Petroleum (RPL) has announced the successful completion of the 2nd year of implementation of its complex refinery, coming up in a special economic zone at Jamnagar. The company achieved 82% overall progress in just 24 months since commencement of the project. Based on the progress so far, the company is on course to complete the project ahead of its initial schedule of December 2008.

Apart from the promoter company, RIL, RPL also offers a good investment opportunity as its 29 million metric tonne per annum (580000 barrels per day ) refinery the world's sixth largest is likely to come on stream before the scheduled December 2008. The commissioning of capacity is well timed given that the outlook for gross refining maragins is bullish till FY 12. Globally refining margins are likely to remain buoyant between $ 5 - $ 10 per barrel from 2008 to 2012 thanks to the huge demand supply mismatch and the time lag of three to four years for new capacities to come on stream.

Reliance Petro to me is like a FD(Fixed Deposit) Invest and forget. Look back in 2012 and you will enjoy the fruits.