Reliance Industries posted robust crude throughput growth in April-June as oil products demand witnessed healthy year-on-year growth, the company said July 23, adding that it had started investing on its clean energy initiatives keeping in mind its vision to achieve net carbon zero by 2035.
While the company has also raised its gas production, a revival in demand for packaging and hygiene products was helping demand for petrochemical products to also bounce back, it added.
"In our oils-to-chemicals business, we generated strong earnings through our integrated portfolio and superior product placement capabilities," said Mukesh Ambani, chairman and managing director of Reliance Industries.
The biggest private refiner recorded a 6.74% year-on-year rise in crude throughput in its April-June fiscal first quarter to 19 million mt at its Jamnagar refineries complex, it said.
The higher processing level reflected a healthy operational performance of its refining segment during the challenging time of the second wave of coronavirus pandemic in India, the company said, adding that Reliance processed 17.8 million mt of crude in the year-ago period.
Reliance operates one of the world's biggest oil refinery complexes in the western state of Gujarat. At its Jamnagar complex, Reliance has an older 660,000 b/d domestic-focused refinery and a 704,000 b/d export-oriented refinery.
Reliance said India's domestic oil products demand in April-June was lower on a quarter-on-quarter basis because of the resurgence of the second COVID-19 wave. But demand was up 18.8% year on year.
Gasoline, diesel and jet demand increased by 35.1%, 22.5% and 142.6%, respectively over the year-ago quarter. Indian domestic air travel has been increasing in most regions, while the international travel into and out of India is still muted, Reliance said.
Improving global oil outlook
Commenting on the global outlook, Reliance said oil demand during April-June recovered to 94.7 million b/d, up 1.2 million b/d from the previous quarter, while it was 11.8 million b/d higher compared to the same quarter in 2020.
While new COVID outbreaks saw global oil demand fall in April and May this year by y 510,000 b/d and 880,000 b/d month-on-month respectively, a sharp uptick in demand by 3.2 million b/d in June contributed to robust demand growth in the quarter.
"Oil supplies remained tight due to the strong compliance to production targets by OPEC plus countries. Stronger oil fundamentals, vaccination programs and better demand outlook have resulted in a steady rise in crude prices throughout Q1 of financial year 2021-22," Reliance said.
In the gas segment, Reliance and its partner BP in the first quarter commissioned the satellite cluster in KG D6 and ramped up production.
It said KG D6 production more than doubled in Q1 compared to the previous quarter, with the ramping up of gas output from the R-Cluster and the start of production at the Sat-Cluster Field. The combined production from these two fields in KG D6 had cross 18 million cu m/d, well ahead of the plan.
Reliance said domestic polymer demand in its fiscal Q1 grew by 28% year on year on a lower base in the year-ago quarter due to lockdown with sustained demand from essential sectors like food and FMCG packaging, e-commerce packaging, health and the hygiene segment.
Domestic polyester demand improved by 203% in fiscal Q1 year on year over the pandemic-hit Q1 of 2020-21. Polyester filament and fiber markets witnessed high growth rates with improved domestic downstream operations supported by firm global markets, the company said.
Energy transition a priority
"I am most excited by the swift start to our new clean and green energy business initiative. We have started investment across all verticals to execute our ambitious plans. We are also resolutely implementing our vision of net carbon zero before 2035, which is our highest priority," he added.
Ambani said earlier that the company would invest $10 billion in the next three years into renewable power.
The management of Reliance has proposed to create a wholly owned subsidiary called Reliance O2C Ltd., which will see the transfer of its refining and petrochemicals businesses to the new unit.
As part of the reorganization, Reliance's New Energy and New Materials business, which would be outside Reliance O2C, would focus on developing a green energy ecosystem and adopt new technologies to reduce carbon footprint. The aim would be to achieve net carbon zero for the group by 2035, while working along with the O2C entity, which will focus on carbon capture and hydrogen production technologies.