Did US President Donald Trump rush into announcing a yet-to-be-signed deal with Reliance Industries Limited (RIL)? Delivered in typical Trumpian style on the social media platform Truth Social, the US president said that Reliance Industries planned to build a refinery in Texas under a ‘$300 billion deal’.

“Thank you to our partners in India, and their largest privately held Energy Company, Reliance, for this tremendous Investment. It is because of our America First Agenda, streamlining Permits, and lowering Taxes, that have attracted Billions of Dollars in Deals coming back to our Nation,” the American president said in a post early Wednesday morning, India time.

Indian stakeholders woke up to this news while there was complete silence from RIL.

For the record, Mukesh Ambani-promoted RIL has so far neither confirmed nor denied this, and hasn’t put out an official statement.

If and when this happens, it would, in a way, expand RIL’s existing exposure to foreign markets, where the cost, feedstock sourcing and execution of a refinery in a foreign land (a maiden attempt for RIL) would be key to watch out for.

What We Know

Trump announced that this refinery, the first in 50 years, would be located in Brownsville, Texas.

The post, without much context or details about the deal, has raised more questions than provided answers.

“Is it an idea or the actual news?” asked a senior executive, an old hand of the Indian oil and gas industry, told The Core. This question perhaps reflected the confusion on the minds of all industry watchers.

In a separate press statement, America First Refining said it has received a 9- figure investment ( which translates to more than $100 million but less than $ 1billion) from a ‘global supermajor’ and also signed a 20-year offtake term sheet with the same company.

Not much is known of the entity named America First Refining. The company's website news section also hosts media coverage clips for another entity named Element Fuel Holdings LLC, which, according to older news reports, was planning the said Texas refinery. Both Element Fuel and America First Refining have the same founder, named John V Calce. Element Fuel's web address now redirects to that of America First Refining.

This is not Calce's first attempt at a US refinery; there have been multiple attempts in the past.

RIL has so far not made any recent disclosure of any major investment in a US company. People in the know in India said there have been talks, but no final agreement has been signed.

An email query sent to RIL remained unanswered, and this story will be updated as and when we receive a response.

The investment figure to set up this facility remains undisclosed. The planned refinery is expected to process 60 million barrels per year of US shale oil, with the agreement to purchase and process $125 billion worth of oil and produce $175 billion worth of refined products, which is possibly the ‘$300 billion’ deal value that President Trump refers to in his post.

RIL And US Shale Gas

America First Refining, in its statement, put the timeline for ground-breaking as early as April-June this year. It also said that the offtake term sheet with the “global supermajor” will secure commitments to purchase, process and distribute American-produced energy exclusively sourced from American shale oil.

If the deal fructifies, it would be RIL’s second tryst with US Shale. The Indian energy conglomerate entered the US Shale gas space in 2010, only to start divesting in 2014, and making a full exit by 2021.

RIL’s Jamnagar facility in Gujarat is the world’s largest single-location refinery, and produces a significant amount of export volumes from one of its special economic zone (SEZ) units. For the full year 2024-25, RIL’s oil-to-chemicals segment exports were valued at Rs 2.83 trillion.

The Optics

Industry sources highlighted that Trump’s latest social media post sits well with recent developments. For instance, Mukesh Ambani, Asia’s richest man, along with his wife Nita, attended a private reception for the President in Washington DC, shortly after Trump began his second tenure as the US president last year.

Industry viewers also highlighted India’s ongoing trade discussions with the US and the country’s intervention in Venezuela, in this context. RIL’s Jamnagar refinery has prided itself on its expertise in processing difficult crude, including that of Venezuela.

However, America First Refining’s statement of using American shale for the planned refinery may rule out Venezuelan crude in that particular context.

India Inc In America

Whichever way this deal goes, RIL would not be the first Indian company with significant investments in the US. Aditya Birla Group’s Hindalco Industries produces and sells in the US market, through its US unit Novelis, an asset bought in 2007 in a then $6 billion deal.

In more recent times, multiple solar manufacturers have set production facilities in the US, primarily to gain from the previous US government’s Inflation Reduction Act (IRA) benefits.

Any significant investments from India in building US capacities will also augur well in India’s ongoing trade talks with the US.

All of this, however, is in the distant future. Much is to be figured out if the potential deal was to fructify – investment figure, economics of setting up in a country with high labour costs, and whether the US government would offer any perks.

For today, RIL’s investors appear indifferent, with stock prices in Wednesday’s trade remaining flat to marginally lower (down 1.27% from the previous day’s close). Perhaps they are also waiting for more details before reacting.