Oil companies gain on gas pricing reform hopes
Reuters Market Eye - Shares in upstream oil and gas companies rally on hopes that a pricing formula, recommended by a government-appointed panel to look into oil and gas exploration contracts, will help sharply raise the prices of domestic natural gas.
The pricing formula, if approved by the government, could raise gas prices to around $8 per mmbtu (million metric British thermal units) by 2014/15 , brokerage Motilal Oswal estimated in a note dated on Thursday.
Motilal Oswal said Oil India Ltd, Oil and Natural Gas Corp Ltd, and Reliance Industries (RELI.NS) would be the biggest beneficiaries of the proposed formula, which involves volume-weighted international prices for gas producers.
While the government would take a final decision on the recommendations, our analysis indicates that domestic producers shall benefit from the proposed gas price formula, analysts at Motilal Oswal said.
ONGC shares are up 2.4 percent, while Oil India gains 3.1 percent. Reliance Industries is flat for the day.
(Reporting by Manoj Dharra)
- Tweet this
- Share this
- Digg this
- Modi to launch plan for every Indian household to have bank account
- More quakes jolt Iceland overnight, spread to second volcano
- U.S. strikes have slowed Iraq militants but not weakened them - Pentagon
- UPDATE 3-Time Warner Cable suffers major outage; New York launches probe
- UPDATE 2-Moscow courts back closure of three McDonald's branches
Jan Dhan Yojana
Prime Minister Narendra Modi will promise on Thursday to provide a bank account for every Indian household when he launches a major initiative that could save billions of dollars in welfare spending and help mend strained state finances. Full Article