Oil refining giant spends big

India Reliance Industries Ltd, owner of the world’s largest oil-refining complex, plans to invest 1 trillion rupees ($18 billion) in India in the next five years to double operating profit. The company will invest across all core business and new businesses including retail and digital services, Chairman Mukesh Ambani said today at a shareholder meeting in Mumbai, where the company is based. The aim is to increase revenue from the retail business as much as six times in three to four years and more than double natural gas output to 60 million cubic meters a day, he said. Operating profit fell five per cent to 227.8 billion rupees in the year ended March 31 from a year earlier, the first decline since at least 2003. Net income fell 21 per cent to 42.4 billion rupees in the three months ended March 31, according to a stock exchange filing on April 20. It was the steepest drop in profit since 2008. Reliance is planning an $8 billion expansion of its petrochemicals business, betting Indian demand for materials used to make plastics and polyester will help counter weak global fuel sales. The proposed spending will be the most since the firm completed its second oil refinery in 2008. The shares gained as much as 2.2 per cent to 731.90 rupees and traded at 723.05 rupees as of 12.14pm in Mumbai. The stock has gained 4.4 per cent this year, lagging behind a seven per cent advance in the benchmark Sensitive Index. Output from the KG-D6 field operated by Reliance is expected at 28 million cubic meters a day in the current fiscal year and may decline to 20 million in the year starting April 1, 2014, oil minister S. Jaipal Reddy said in parliament on May 8. From: Gulfnews