Ambani classifies RPL and RIL among top 5 companies

Both Reliance Petroleum Limited (RPL) as well as promoter Reliance Industries (RIL) will be among the top five companies in India on all major financial parameters meters," Reliance group chairman Dhirubhai Ambani said at RPL's annual general meeting today.

Addressing shareholders at Jamnagar in Gujarat, Mr Ambani called for a change in the tariff structure in the refining business. The current structure encourages large-scale imports of refined products and does not encourage the creation of domestic refining assets, he said.

Promoting a level playing field in the refining sector, he said, the government should not discriminate against the private sector in favour of the public sector, since all assets are national assets.

Commenting on Reliance's potential, Mr Ambani said the annual output at Jamnagar will be of the order of Rs 28,000 crore, which is 4 per cent of the total turnover of the Indian corporate sector.

It will lead to import subsitution of $5 bn every year, he said. Listing Reliance's achievements in Jamnagar, Mr Ambani said the group has made a combined investment of Rs 24,000 crore in the complex, which is the largest ever made at a single location in India. The multiplier effect of activities at Jamnagar is estimated to be of the order of Rs 112,000 crore ($26 bn) every year - equal to around 6.5 per cent of India's gross domestic product (GDP), Mr Ambani indicated. The 27-million tonne refinery project, spread over a 7,500 acre area, is being currently being commissioned in a phased manner. In this context, the Reliance chairman also said no multinational oil company has come forward to invest even a single dollar in the Indian refining sector.

Taking this as a sign of Reliance's commitment to the country, Mr Ambani said no new refining capacity, except for RPL, has been created in the private sector so far. Elaborating on the refinery's flexibility, he said it has the ability to deliver products (petrol/diesel) that meet international specifications even beyond the stringent Euro norms.

The refinery's higher complexity results in a higher conversion of crude oil to light and middle distillates. The project has been designed to produce LPG and diesel which are currently deficient in India, he said. The yield of value added distillates will be 85 per cent compared to 80 per cent for existing Indian refineries, he said.

Promising investors better returns on equity as the project starts generating revenue and cashflows, Mr Ambani said RPL has already achieved a current market capitalisation of Rs 15,000 crore even before the project is fully commissioned.

The Reliance group will continue to hold over 60 per cent of the fully diluted capital of RPL representing its commitment to the project, he said. The debt-equity ratio, of the project stands at below 1:1, he said. For debt investors, he said, the company's investment ratings and overall credit quality are expected to improve significantly. .

Compiled from local news media