Preparing the company profile 2018

“Reliance Industry Limited ”

By

Dhruvil Shah

Under the guidance of

Prof. Lincoln Pratson

Gendell Professor,
Energy & Environment Nicholas
School of the Environment

A Project Report Submitted to

Duke University

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For index

Chapter Title Page no.

1 Guidelines 3-4
2 What Company does 5-10
3 How it has performed 11-13
4 What challenges/Successes 14-16
The company had

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Step -1

What the Company Does:

 What company/business unit are you evaluating?

 What is the focus of the company/business unit?
 What sector of the oil and gas industry does the company’s/business unit’s
focus fall under?
 Is the company or parent company of the business unit public, private, or
government controlled? Explain your basis for categorizing the company as such.
 Which of the following is the company more dependent on demand for, if any:
crude oil, raw natural gas, processed natural gas, and/or refined petroleum
products?
 Where does the company/business unit operate geographically?
 How does the total size of these operations compare to those of other
companies that compete in this sector (e.g., is your company among the top five
biggest in the sector, worldwide if international or in the country they operate if
domestic)?

Step -2

How the Company Has Performed

 What have been the overall state of the sector that the company operates in
over the past 3-5 years in terms of product supply, demand, and prices?
 Has the company done relative to other companies engaged in the same
activities?
 What does the company/business unit (and/or expert followers of it) say are its
plans or strategy for the upcoming several years?

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Step -3

What the Challenges Have Been for the Company:

 What have been the most significant challenges and/or

successes for the company over the past 3–5 years?
 What challenges/successes does the company/business
unit (and/or expert followers of it) say it will be positioning
itself for in the next 3–5 years?
 What does the company/business unit (and/or expert
followers of it) say are its plans or strategy for the
upcoming several years?

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Step-1:What the Company Does

 The Reliance Group founded by Dhirubhai H. Ambani, is India’s

largest private sector enterprise, with business in energy and

materials value chain. The Group’s annual revenues are in excess

of $34 billion. The flagship company, Rilance Industries Limited, is

Fortune Global 500 company and is largest private sector

company in India.

 The company operations can be classified into four segments

namely:

 Our operations span from the exploration and production

of oil and gas

 to the manufacture of petroleum product

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 polyester products, polyester intermediates, plastics,

polymer intermediates, chemicals, synthetic textiles and

fabrics

The company's petrochemical, refining, oil and gas-related operations form

the core of its business; other divisions of the company include cloth, retail

business, telecommunications and special economic zone (SEZ) development. We

are particularly interested in Exploration & Production and Petroleum Refining &

Marketing.

Exploration & Production

Reliance’s domestic portfolio comprises of six conventional oil

and gas blocks in Panna Mukta Tapti (PMT), Krishna Godavari,
Mahanadi, Gujarat Saurashtra, & Cambay Basins and two Coal
Bed Methane (CBM) blocks in Sohagpur East and West in
Madhya Pradesh.Oil and gas is currently being produced from
our PMT blocks and KG D6 blocks in India and shale gas JVs
in the US.

1. Conventional:
RIL is producing natural gas from the gas fields D1-D3 since April 1,
2009, and light crude oil from the D26 oil field in KG D6 block, since
September 17, 2008
Reliance, along with its partners, has committed ~$6 billion for
second wave of projects in KG D6 over the next few year.

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2. Coal Bed Methane:

RIL is producing natural gas from the gas fields D1-D3 since April 1,
2009, and light crude oil from the D26 oil field in KG D6 block, since
September 17, 2008
Reliance, along with its partners, has committed ~$6 billion for
second wave of projects in KG D6 over the next few year.

Petroleum Refining & Marketing

1. The Jamnagar manufacturing division is the world's largest

refining hub
With crude processing capacity of 1.24 million Barrels Per
Stream Day (BPSD), the Jamnagar refinery is a trendsetter and
has won several awards, including the prestigious
'International Refiner Of The Year' award. It also enjoys the
distinction of housing some of the world's largest units, such as
the Fluidised Catalytic Cracker (FCC), Coker, Alkylation,
Paraxylene and Polypropylene plants. This complex refinery is
future ready and can produce gasoline and diesel of any
grade
2. Reliance also has another refinery – the sixth largest in the
world – in the Special Economic Zone at Jamnagar. This
refinery has a capacity for processing 580,000 BPD of crude

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Production Analysis
 Reliance Industries limited is private and public limited company.
 Company’s turnover of nearly USD 66.8 billion and a net profit of
over USD 3.9 billion.
 In 2012–13, it earned 76% of its revenue from refining, 19% from
petrochemicals, 2% from oil & gas and 3% from other segments.

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Products Applications
Liquefied Petroleum Gas (LPG) Domestic and industrial fuel
Propylene Feedstock for polypropylene
Naptha Feedstock for petrochemicals
Gasoline Transport fuel
Jet/Aviation Turbine fuel Aviation fuel
Superior Kerosene Oil Domestic fuel
High Speed Diesel Transport fuel
Sulfur Feedstock for fertilizers and
pharmaceuticals
Petroleum Coke Fuel for power plants and cement
plants

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Geographic location of Refineries

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Step-2:How the Company Has Performed

Oil and gas sector in India

 In 2017, India retained its spot as thethird-largest energy consumer^ in the

world with oil and gas accounting for 37 per cent of its total energy
consumption. Annual oil consumption stood at 4.69 million barrels per day
(MBPD) and 54.20 billion cubic meters (bcm) of gas.

 India has proven oil reserves of 600 million metric tonnes (MMT), and gas
reserves of 1.2 trillion cubic meters. Production of crude oil and natural gas
during 2017-18 reached 0.64 mbpd and 31.63 bcm, respectively. Production of
crude oil reached 0.29 mbpd during April-August 2018. Natural gas production
during Apr-July 2018 stood at10.53bcm

 India has a flourishing crude oil refining industry with an annual capacity of
247.6 MMT, as of Sep 1, 2018. In FY18, India’s public and private sector
refineries processed 160.77 MMT and 91.16 MMT of crude oil
 Oil imports rose sharply to US$ 87.37 billion in 2017-18 from US$ 70.72 billion
in 2016-17.
 India retained its spot as the third largest consumer of oil in the world in 2017
with consumption of 4.69 mbpd of oil in 2017,
 India was the fourth-largest Liquefied Natural Gas (LNG) importer in 2017
 RIL's twin refineries at Jamnagar maintained a high operating rate of 110 per
cent, processing 67.9 million tonnes (MT) of crude during the last financial
year, compared to average refinery utilisation rates of 86.9 per cent in North
America, 80.7 per cent in Europe and 83.5 per cent in Asia. In the first quarter
of FY16, the refineries processed 16.6 MT of crude with an average utilisation
of 107 per cent

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Comparative Study

Company Sales Current Change(%) P/E ratio Market Ownership

(Rs Million) Price Capitalization
(Rs Million)
Reliance 9033500.00 807.85 .10 14.10 2612463 Public listed
Industry
IOCL 4345085.70 261.75 .56 0.0 635516 78.9% state
owned
BPCL 2119729.70 336.40 -.46 0.0 243235 54.9% state
owned
MRPL 537702.76 65.10 1.88 30.32 114094 68.4% sate
owned
HPCL 1795123.60 300.20 .55 0.0 101655 51.1 state
owned
Essar Oil 479053.30 65.15 4.16 0.0 88973 Public listed
Chennai 408078.60 129.80 .46 0.0 19328 69.2% state
Petrol corp owned

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Step 3: What the Challenges/Successes Have Been for the

Company

Successes

Oil and Gas Exploration and Production

 174.0 BCFe RIL’s share of production in US shale operations

 1088 Shale gas producing wells
 95.0 RIL’s share production in India
 CBM Project commenced commercial production from block in
Sohagpur
 Shahdol Phulpur pipeline connecting CBM field to India gas grid
 KG D6 JV production at 101.1 BCF gas and 1.25 MMBBL Oil and
gas condensates

Refining and Marketing

 US $19.5 total exports of refined products

 1221 Fuel outlet operational
 US $11.0/bbl Refining margins
 240 KL/month/outlet Industry leading throughput
 US $5.2/bbl premium over Singapore benchmark,significantly
above five year average
 65 Different Crude grade processed during year
 425 flights Refueled daily in presence of 25 airports

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 The petro cake gasification project to achieve sustainable long

term energy cost reduction

Challenges

 Relationship with ONGC

In May 2014, ONGC moved to Delhi High Court accusing RIL of
pilferage of 18 billion cubic metres of gas from its gas-producing
block in the Krishna Godavari basin. Subsequently, the two
companies agreed to form an independent expert panel to probe
any pilferage.
 Arbitration Agaist Government $1.7-Billion Claim
An international arbitration tribunal rejected the Indian
government’s claim that consortium led by Reliance Industries
Ltd.siphoned gas from oil and Natural Gas Corporation Ltd,’s fields
in Krishna-Godavari basin off the eastern coast.
 Intense domestic competition
 Rising petrochemical supply in middle east
 Fluctuating crude oil prices
 Economical slowdown in India

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Stratergies

 Ebit from Oil and gas business was negative at Rs 1536 crore
in the last financial year.
 KG-D6 will begin gas gas production in 2020
 KG-D6 will reach full production of 30-35 million standered
cubic meters per day by 2022
 Reliance’s other big project of petcoke gasification,costing $5
billion,is expected to commission in the last quarter of the
current fiscal.

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Bibliography

 Reliance Industry limited website

www.ril.com
 India Brand Equity Foundation website
www.ibef.org
 Economics Time Newspaper Website
m.economicstimes.com
 Reliance Industry Limited’s annual report 2016-2017
 Wikipedia
www.wikipedia.org

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