RIL petrochemical business posted record profit in 2017-18

Mumbai, June 7 (IANS) Reliance Industries Ltd (RIL)’s refining and petrochemical businesses posted record level of profitability on the back of expanded capacities, high operating rates, improved cost competitiveness and better margins, the company has said in its latest annual report.

The company’s oil and gas exploration business saw declining volumes and lower prices, the Mukesh Ambani-led RIL said in its Annual Report 2017-18.

“The refining business improved upon the preceding year’s strong Gross Refining Margins (GRMs),” it said.

GRMs signify the earning on converting a barrel of crude to petroleum products.

“The petrochemicals segment posted a significant jump in profits due to higher volumes from expanded capacities and better margins,” the report said.

RIL’s refining and marketing segment reported a 3.2 per cent increase in earnings before interest and tax (EBIT), or operating profit climbing to its highest-ever level of Rs 25,869 crore (around $4 billion).

The GRMs for the year rose to a nine-year high of $11.6 per barrel (bbl), over last year’s $11 per bbl.

“RIL’s GRM outperformed the Singapore complex margins by $4.4 per bbl,” the company said.

“Our oil and gas business continued to face headwinds owing to declining volumes and soft prices that improved towards end of the year. Volumes from conventional fields and US shale were lower on account of natural decline and slowdown in development activity.”

RIL’s production was down 16.9 per cent to 78.9 billions of cubic feet equivalent (Bcfe) whereas the US shale volume fell 19.7 per cent to 139.7 Bcfe.

“On the positive side, Reliance is poised to become one of the largest non-conventional gas producers in India with the ramp up of CBM (coal bed methane) production that crossed one million standard cubic meters per day,” the company said.

“To sustain production, the second phase of development has also commenced,” it added.

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