Reliance Shares Gain On Reports Of Approval For New Discover

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Shares in Reliance Industries, India's biggest conglomerate, extended gains Tuesday to inch near the crucial Rs 800 resistance levels.

The stock, which traded lower for most of the day, gained on news that three of RIL's discoveries - D 29, D 30 and D 31- have received conditional approval from the oil ministry. The approval reportedly came after oil ministry's management committee for RIL's KGD-6 gas block met RIL officials to clear the investment plans for KG-D6 block, which have been pending for the past two years.

The three discoveries are likely to help RIL-BP-Niko combine, the joint owners of the KG-D6 fields, to arrest the gas production decline in KGD-6.

Sources told NDTV Profit that the approval is conditional. RIL will have to drill more appraisal wells with the right technique and adhere to the time line set in consultation with the oil ministry.

The ramp up in gas production is unlikely to happen soon and it may take two-three years to boost production, sources said.

Earlier in the day, Oil Minister S Jaipal Reddy said that RIL is currently producing 29 million standard cubic metres a day (mscmd) of gas output from its KG D6 block.

This is much lower than the peak target of 80 mscmd from the block, leading to severe shortage of gas, he told reporters.


At 2.40 p.m., shares in the company traded 1 per cent higher at Rs 793.50 on the BSE, outperforming the broader BSE oil and gas index, which traded 0.8 per cent higher.


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