Reliance Petro Mulls Output Hike Through Debottlenecking

Reliance Petroleum (RPL), at its 10th annual general meeting today, said the company was planning to increase production from its refining assets. The proposed output hike is expected to contribute to RPL's profitability.

However, the company, in a press release, did not give any additional information on the extent of rise in capacity or the additional expenditure.

RPL's project cost at Rs 14,250 crore translates into a capital cost of Rs 5,278 per tonne, which is lower by almost 30 per cent compared with that for refineries set up recently by public sector companies.

The hike in production will be done at a lower per tonne capital cost in line with its plan to become among the lowest cost producers of petroleum products globally, the company said.

RPL said this will be done through optimising crude oil procurement and the product mix, improving refinery production yields, enhancing product quality, reducing operational costs and focusing on energy conservation.

RPL has also chalked out strategies for entering retail marketing. As part of the plan, the company may enter into joint ventures and alliances, acquisition of marketing and distribution assets, and development of its own distribution and marketing infrastructure.

The company's memorandum of understanding with Indian Oil Corporation for forming a marketing joint venture, and the company's participation in the process for disinvestment of IBP, reflect this strategies, RPL said.

RPL has already obtained approval for syndicated foreign currency term loan facility for $750 million. Agreements for $500 million have already been signed. The other deals are expected to be finalised shortly.