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`Ind AA+' for Reliance Petro NCD programme

KOLKATA: Fitch Ratings India has assigned an `Ind AA+' rating to Reliance Petroleum Ltd's Rs 6,000-crore NCD programme (comprising existing debt and future issuance).

The rating embodies high credit quality, strong protection factors and modest risk.

Reliance Petro, according to a Fitch press note, is the country's most complex refinery, with a capacity of 27 million tonnes per annum (tpa).

It is also the world's largest greenfield refinery, and achieved synchronisation within three months. It has the world's largest fluidised catalytic cracker and delayed coker.

Set up at a competitive capital cost, it enjoys economies of scale. Its configuration provides flexibility to process a wide range of crudes. The refinery enjoys locational advantage, being near the crude oil producing regions of West Asia.

A 100-km pipeline connects it to the Kandla-Bhatinda pipeline, and reaches Reliance Petro's products to the deficit markets of north-west India.

According to Fitch, the company vertically integrates the group's operations. It supplies the four controlled products - LPG, gasoline, kerosene and gas oil - to the oil PSUs. These are lifted at the refinery gate at import-parity prices. Reliance Indust ries consumes about 25 per cent of its output.

Reliance Petro is a stand-alone refinery, and its margins could be affected due to downturns in the oil sector. Its gross refining margins could be affected due to decline in tariff protection.

Reliance Petro has plans to acquire stakes in marketing companies and develop its own marketing network. The country's oil sector would be deregulated from April 2002. -- Our Bureau