03-03-09 If the past decade saw the world getting Bangalored with BPO (business process outsourcing), Mukesh Ambani's Reliance Industries Ltd. (RIL) announced the arrival of RPO -- or Refining Process Outsourcing -- three years ago by turning its domestic refinery at Gujarat's Jamnagar into an export unit even as subsidiary Reliance Petroleum Ltd. (RPL) was building another plant at the special economic zone next door.
With the amalgamation of the two firms, the combined entity now straddles a capacity to single-handedly keep India running for five-six months.

But domestic market was perhaps the last thing on Ambani's mind when he decided to turn the old refinery into an export unit. With government subsidising state-run oil marketers to keep pump prices low at home in the face of rising crude prices, there was no money for private firms.
The idea then was to cash in on the surging demand from booming economies abroad that were finding it difficult to build new refineries or expand existing ones due to stringent environmental norms.

Turning the old plant into an export unit meant adding its 33 mm ton capacity to the new plant's 29 mm tons of export capabilities and a lot of tax breaks. The two plants together made the world's largest refining complex at a single location.
Two companies running the complex was fine till the global meltdown came along. It was time for a rejig as demand as well as refining margins fell with sliding crude prices and the future of the domestic market remained uncertain due to government refusing to give up control on prices.

Amalgamation will give Reliance a huge elbow room to tune its operation to demand and can better plan how much of each product to make. It will now have options on switching off capacities according to demand and price of products.
The technical capabilities of the two units give Reliance capability to refine any type of crude and maintain a healthy refining margin even in times of low crude prices.

Average key products capacity inmm tpy
Diesel -- 24-26
Petrol --16-20
Jet fuel -- 2-4
Cooking gas -- 10
Petcoke -- 4-6
Other products include naphtha, sulphur etc.