By Archana Chaudhary
Sept. 22 (Bloomberg) -- Reliance Industries Ltd., India's biggest company by market value, fell in Mumbai trading on speculation that a lawsuit may delay the sale of natural gas from the company's largest field.
The shares fell 0.8 percent to close at 2,039.1 rupees in Mumbai trading today after advancing 3.5 percent. The stock has declined 29 percent this year compared with a 31 percent drop in the Bombay Stock Exchange's benchmark Sensitive Index.
The Bombay High Court is hearing a dispute over the price at which gas from the offshore field will be sold to NTPC Ltd. and Reliance Natural Resources Ltd. Reliance Industries started producing oil from the field last week. The company's head of oil and gas yesterday declined to comment on what it would do should the court's verdict be delayed.
``There's still uncertainty around gas production and sale,'' Niraj Mansingka, an analyst with Edelweiss Capital Ltd. in Mumbai said by telephone today.
Gas production from the field has been pushed to next year because of tough weather conditions and equipment delays, P.M.S. Prasad, president and chief executive officer for oil and gas, said yesterday. The company plans to start producing 90 million cubic meters of saleable natural gas a day in January, he said.
Billionaire Chairman Mukesh Ambani is investing $5.2 billion to develop the Krishna-Godavari basin, the field off India's east coast that's expected to more than double the country's gas output. Reliance shares rose earlier as investors expected the company would benefit from crude prices that have risen 46 percent since the reserves were first found in June 2006.
Production Surge
``Reliance's oil production has been a positive for the stock,'' Edelweiss Capital's Mansingka said.
Reliance's oil and gas production will surge to 550,000 barrels a day in the next six quarters from 5,000 barrels and increase India's energy output by 40 percent, Ambani said in Mumbai yesterday.
India, the world's second-fastest growing major economy, imports 70 percent of its energy needs and doesn't produce enough gas to meet demand from power and fertilizer makers.
Reliance Industries is seeking higher than contracted prices for the gas to be sold to Reliance Natural and NTPC. The agreement was to sell 28 million cubic meters of gas a day at $2.34 per million British thermal units, the Press Trust of India said on July 26 last year.
The government has set the price of natural gas from the Krishna Godavari field at $4.2 per million British thermal units, less than the $4.5 Reliance had sought.
The Bombay High Court has restrained Reliance from selling the gas to companies other than Reliance Natural and NTPC.
To contact the reporter on this story: Archana Chaudhary in New Delhi at achaudhary2@bloomberg.net.
Posts
No comments:
Post a Comment