Production of gas from new fields to push RIL’s metrics
MUMBAI : Reliance Industries Ltd’s (RIL) oil and gas business, which remained sluggish in the last two quarters, is expected to improve, after the company started production from the new R cluster in the Krishna-Godavari Basin fields last week. Analysts expect production from the cluster to push domestic gas volumes and contribute 3% to RIL’s earnings and cash flows by 2023.
The R Cluster is expected to reach peak production of 13 million metric standard cubic metres (mmscmd) a day in 2021 and plateau thereafter. Two other fields, Satellite Cluster and MJ Field, are expected to begin producing in 2021-22. RIL and partner BP plc have together invested $6 billion in the project. “RIL’s announced start of gas production will support 48% rise in domestic gas supplies after years of flattish output. The new production should contribute ~3% of earnings and cash flows by 2023,” said Morgan Stanley in a note to clients.
In fact, analysts estimate a strong revival in earnings from RIL’s refining and petrochemicals segments, which have been displaying sluggishness for over two quarters, primarily due to covid-19.
