Numaligarh Refinery Limited (NRL) which has done very well has said the challenge for the Company continues to be achieving 100% capacity utilization within the constraints of limited availability of domestic crude with the added challenge of operating the refinery at a higher on-stream day during the year.

This was mentioned in the 2021-22 annual report which was placed at the annual general meeting of the refinery held recently.

During the year, NRL has achieved highest ever sales turnover of Rs 23,546 Crore which was higher by 26.95% as against Rs 18,548 Crore in the previous year, primarily on account of increase in product prices. Highest ever Profit before Tax (PBT) was also achieved by the Company at Rs 4,848 Crore, which is higher by 18.37%, as compared to Rs 4,083 Crore
of the previous financial year mainly due to increase in overall gross margin and higher inventory gains.

"The year 2022-23 will bring new challenges to be conquered in terms of executing its three major projects viz., Numaligarh Refinery Expansion Project (NREP), Indo-Bangla Friendship Pipeline (IBFPL) and Assam Bio Refinery Pvt. Ltd. (ABRPL) within the less severe lockdowns, travel restrictions, mild to severe supply chain disruptions, sustained migrant worker woes" the refinery said in its report.

Inadequate availability of crude oil and natural gas in Northeast India continues to be a threat for the Company.

"In the long-term scenario and in a broad industry perspective, with rising global demand, highly volatile prices and increasingly stringent environmental regulations, the oil and gas industry continue to face three major challenges: reduce costs, optimize the performance of its industrial base assets, and reduce its carbon footprint" the report said.

It said another risk and associated concern for 2022-23 might be any decline in demand of petroleum products in the country in the event of a new variant of COVID-19 related adversity increases and lockdown are reinstituted.

"This may once again force refineries to curtail production and may even resort to temporary shutdowns. Since three projects of the refinery are expected to be in active implementation stage, progressing and completing the projects without time and cost overrun will be of concern and major thrust area for the Company. If lockdown are reinstituted and/or continued for a longer period, there is a high risk of delay in completion of these projects" it said.

On the opportunities front, it said the opportunities in refining depend on several factors, including regional demand for refined products, available crude oil supplies, and unique regional environmental regulations, among others. BPCL is the major customer contributing to more than 80% of product sales followed by IOCL, HPCL and other private OMCs.

NRL has the biggest refinery in Northeast region and is a major supplier for oil marketing companies in North East, Bihar, West Bengal and Eastern UP. With growth projected in these markets in next 5 to 10 year horizon, there is an opportunity for growth for NRL as well. To leverage this opportunity, NRL has already invested in a project to expansion of its refinery to 9 MMTPA, for which, Government of India has already accorded approval for investment of Rs 28,026 Crore.

On its strengths, NRL’s strong understanding of regional markets of NER has amassed a significant presence in the region and continues to be a key strength of the organization. NRL has a well-built brand presence in the NER domestic market which helps in retaining existing customers and its geo-strategic location makes it to highly capable to meet the growing energy demands of neighbouring countries in the South East Asian region.

Another core strength of NRL is its high complexity factor refinery owing to advanced secondary processing technologies that has enabled achievement of high distillate yield.

In terms of production efficiency, NRL continues to be one of the best performing refineries in the country with highest distillate yield, lowest specific energy consumption and high gross refining margins.

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