Ambani Outlines Push Into High-Value Chemicals as RIL's O2C Business Enters Next Phase

The upcoming initial public offering (IPO) of Jio Platforms is a major milestone in Reliance Industries' decade-long strategy to diversify its revenue and cash flows away from the oil and gas value chain. This move aims to secure a stronger foothold in fast-growing sectors like telecom, digital services and retail, according to Business Standard.

However, the legacy Oil-to-Chemicals (O2C) and oil and gas exploration businesses remain crucial to RIL’s overall finances as key sources of free cash flow. Chairman and Managing Director Mukesh Ambani laid out a strategy for their next phase of growth at the company’s 49th Annual General Meeting (AGM) in Mumbai on Friday, June 20.

Shifting Financial Balance

Over the last decade, the contribution of Reliance Industries’ legacy O2C and oil and gas exploration businesses to its consolidated revenues and profits has steadily declined. In FY25, the O2C business accounted for 59.3% of consolidated segment revenue, down from 66.8% in FY22 and 89.4% in FY16.

The division’s contribution to profit before interest and taxes declined to 37.1% in FY26 from 51% in FY22 and nearly 87% in FY16. RIL brought its oil refining and petrochemicals businesses together under the O2C division in FY20 to leverage business complementarities. Meanwhile, the oil and gas exploration division accounted for 1.8% of consolidated segment revenue and around 10% of its profit before interest and taxes in FY26.

Evolution of O2C

“In FY26, our Oil-to-Chemicals business demonstrated the ability to stay strong when the external environment turns volatile. The business is entering its next generational strategic evolution. Every barrel of crude we process will increasingly yield chemicals and high-value materials, not just fuels. More efficient. More export-driven. More valuable. This business financed our past. It is financing our future,” Ambani said at the AGM.

To drive this evolution, the O2C division is implementing three major investments. RIL is constructing a 3-million-tonne purified terephthalic acid (PTA) facility at Dahej to cement its position as a highly cost-competitive global producer. The company is also setting up one of the world's largest carbon fibre facilities at Hazira and expanding its PVC and CPVC capacity, including a new 1.2-million-tonne PVC plant at Nagothane.

The oil and gas division has steadily ramped up production, accounting for nearly 30% of India's natural gas output in FY26. “Our KG-D6 and coal bed methane (CBM) fields together constitute one of India’s most productive natural gas platforms. Given E&P’s vital role in India’s energy independence, Reliance will continue to actively pursue new opportunities in this sector,” Ambani said at the AGM.

RIL has initiated new investments to increase gas production and sustain plateau crude oil production through FY27 and beyond. This includes implementing multilateral wells—the first of their kind in India—to enhance natural gas output from CBM fields, with 23 of 40 wells already completed in its second campaign.