Reliance Industries sees its oil-to-chemicals (O2C) and oil & gas businesses navigate a volatile FY27 marked by geopolitical tensions, supply disruptions and pressure on petrochemical margins, even as the company bets on India’s growing energy demand and infrastructure expansion to support long-term growth.
In its FY26 annual report, Reliance said the outlook for FY27 remained “extremely vulnerable” to geopolitical, macroeconomic and policy risks amid the continuing Middle East conflict, volatile crude prices and weakening global growth.
For the O2C business, Reliance said global oil demand growth was expected to remain sluggish in FY27 due to elevated oil prices and an economic slowdown. Damage to refinery and oil infrastructure due to the Middle East conflict could prolong supply disruptions and keep markets volatile, it added.
Petrochemical margins under pressure
The company flagged several near-term challenges, including volatile product and feedstock prices, government directives on the special additional excise duty (SAED), petrochemical feedstock regulations, and duty exemptions on key petrochemical products, which could weigh on domestic demand and margins. It also pointed to rising Chinese exports, global overcapacity in downstream chemicals, and the long-term impact of electric vehicles and carbon regulations on fossil fuel demand.
At the same time, Reliance sees opportunities emerging from India’s infrastructure and industrial growth, rising mobility demand and increasing fuel deficits in non-OECD markets. The company said domestic demand for fuels and downstream chemicals continued to benefit from highway construction, higher vehicle ownership and expanding freight and passenger movement.
O2C business posts operational gains
During FY26, Reliance’s O2C business delivered operational gains despite volatile energy markets. The company said profitability was supported by higher operating rates, optimised feedstock sourcing and increased domestic product placements. It also highlighted the expansion of its multi-energy footprint through EV charging and infrastructure for compressed natural gas and compressed biogas.
KG Basin output remains key growth driver
On the oil and gas front, Reliance said FY26 was marked by “disciplined operations” focused on sustaining production and improving recovery from the KG Basin assets. The business contributed nearly 30% of India’s domestic gas production with an average output of 26.7 million metric standard cubic metres per day.
Reliance plans to intensify activity in FY27 with four infill wells in the KG-D6 block targeting incremental recovery of around 220 billion cubic feet of gas, along with three workover wells aimed at sustaining production. Exploration surveys are also underway in newly awarded deepwater blocks under the Open Acreage Licensing Policy (OALP).
CBM expansion offsets production decline concerns
The company said there was progress in coal bed methane (CBM), where multilateral horizontal wells — claimed to be a first in India — helped reverse field decline and raise output by nearly 10% year-on-year.
Reliance, however, acknowledged that the oil and gas business continues to face challenges from natural decline in KG-D6 production and softer gas prices, which led to lower revenues and EBITDA during FY26.