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Reliance shares fall on uncertainty over natural gas output schedule

Reliance Industries, India's biggest company by market value, gave up early gains and fell in Mumbai trading on speculation that a lawsuit may delay the sale of natural gas from the company's largest field.

  • Bloomberg
  • Published: 23:53 September 22, 2008
  • Gulf News

New Delhi: Reliance Industries, India's biggest company by market value, gave up early gains and 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 0.9 per cent to Rs2,036.2 at 3:20pm local time after advancing 3.5 per cent. The stock has declined 29 per cent this year compared with a 31 per cent 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 National Thermal Power Corporation (NTPC) and Reliance Natural Resources.

Reliance Industries started producing oil from the field last week. Its 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 in Mumbai said by telephone on Monday.

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 on Monday. The company plans to start producing 90 million cubic metres of saleable natural gas a day in January, he said.

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.

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