Reliance envisions double gains from returning oil demand and low carbon initiatives

Strong points

Crude oil throughput increases 6.7% year-on-year during the April-June quarter

Solid oil fundamentals, a vaccination campaign supporting world prices

Launches investments in all verticals to achieve clean energy goals

Reliance Industries posted robust growth in crude throughput in April-June, as demand for petroleum products experienced healthy year-over-year growth, the company said on July 23, adding that it had started invest in its clean energy initiatives with its vision of achieving a net carbon footprint in mind. zero by 2035.

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While the company has also increased its gas production, a pickup in demand for packaging and hygiene products has also helped demand for petrochemicals rebound, he added.

“In our oils to chemicals business, we have generated strong earnings from our integrated portfolio and superior product placement capabilities,” said Mukesh Ambani, president and CEO of Reliance Industries.

The largest private refiner recorded a 6.74% year-on-year increase in crude throughput during its fiscal first quarter from April to June to 19 million tonnes at its Jamnagar refinery complex, a-t- he declares.

The higher processing level reflects a healthy operational performance of its refining segment during the difficult times of the second wave of the coronavirus pandemic in India, the company said, adding that Reliance had processed 17.8 million tonnes of crude in the during the period of last year.

Reliance operates one of the largest oil refinery complexes in the world in the western state of Gujarat. In its Jamnagar complex, Reliance owns a former 660,000 b / d refinery focused on the domestic market and a 704,000 b / d refinery focused on export.

Reliance said India’s domestic demand for petroleum products in April-June was lower quarter-over-quarter due to the resurgence of the second wave of COVID-19. But demand increased 18.8% year on year.

Demand for gasoline, diesel and jet aircraft increased 35.1%, 22.5% and 142.6%, respectively, from the previous year quarter. Indian domestic air travel has increased in most regions, while international travel to and from India is still on the muted, Reliance said.

Improving global oil outlook

Commenting on the global outlook, Reliance said oil demand from April to June recovered to 94.7 million b / d, up 1.2 million b / d from the previous quarter, so it was 11.8 million bpd higher than in the same quarter in 2020.

As the new COVID outbreaks have seen global demand for oil drop in April and May this year by 510,000 b / d and 880,000 b / d respectively, a sharp increase in demand of 3.2 million b / d in June contributed to robust demand. growth during the quarter.

“Oil supplies have remained tight due to strict adherence to production targets by OPEC plus countries. Stronger oil fundamentals, vaccination programs and better demand prospects have resulted in steadily rising oil prices. gross throughout the first quarter of fiscal year 2021-2022, ”said Reliance.

In the gas segment, Reliance and its partner BP commissioned the KG D6 satellite cluster in the first quarter and stepped up production.

He said KG D6 production more than doubled in the first quarter compared to the previous quarter, with the increase in gas production from the R-Cluster and the start of production from the Sat-Cluster field. Combined production from these two fields in KG D6 had passed 18 million m3 / d, well ahead of plan.

Reliance said domestic demand for polymers in its fiscal first quarter grew 28% year-on-year on a lower basis than last year’s quarter due to foreclosure with sustained demand from critical sectors like food packaging and FMCG, the e-commerce packaging, health and hygiene segment.

Domestic demand for polyester improved 203% in the first quarter of the year year-on-year compared to the pandemic-hit first quarter of 2020-2021. The polyester filament and fiber markets have seen high growth rates with improved domestic downstream operations supported by strong global markets, the company said.

Energy transition a priority

“I am very excited about the rapid start of our new clean and green energy business initiative. We have started investing in all verticals to execute our ambitious plans. We are also resolutely implementing our vision of net zero carbon by 2035, which is our highest priority, ”he added.

Ambani said earlier that the company would invest $ 10 billion over the next three years in renewable energy.

Reliance management has proposed to create a wholly owned subsidiary called Reliance O2C Ltd., which will see the transfer of its refining and petrochemicals activities to the new unit.

As part of the reorganization, Reliance’s New Energies and New Materials business, which would be outside Reliance O2C, would focus on developing a green energy ecosystem and adopting new technologies to reduce the carbon footprint. . The goal would be to achieve net zero carbon for the group by 2035, while working with the O2C entity, which will focus on carbon capture and hydrogen production technologies.

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Felix J. Dixon