India's big refiners think global

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Top officials from Reliance Industries and smaller rival Essar Oil Ltd told the Reuters India Investment Summit they needed to boost overseas output to enhance the supply security of their refineries, which they are expanding to become the biggest and fourth-largest in the world respectively.

And they are also eager to buy retail outlets abroad where they can sell fuel at market rates, as opposed to regulated local prices that are kept intentionally low by the government.

But, even with a combined refining capacity of some 1.9 million barrels per day (bpd) at the end of this decade, the two firms are still half the size of vertically integrated majors such as Exxon Mobil Corp or BP Plc.

"The key is if you want to be an integrated player then you have to have scale," Manisha Girotra, managing director and chairperson for UBS India, said at the Reuters Summit.

"You can't be one of the smaller players," Girotra said.

Reliance, India's biggest listed firm with a market capitalisation of over $100 billion, and Essar Oil hope to be producing more than 500,000 bpd at overseas oilfields within the next five years, officials said, covering more than one-quarter of their capacity as a way to guarantee future supplies.

They're not alone in that pursuit.

While huge state-owned refiners like China's Sinopec Corp and national standard-bearers like Malaysia's Petronas have stolen the limelight in the race for resources, private firms like Japan's Nippon Oil Corp and Singapore Petroleum Co are also searching for oil.

However their independent peers in the West, such as Valero Energy Corp of the United States or Europe's Petroplus, have steered clear of deviating into the upstream.

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