Oil companies gain on gas pricing reform hopes

Fri Jan 4, 2013 12:31pm IST

Engineers of Oil and Natural Gas Corp (ONGC) work inside the Kalol oil field in Gujarat September 12, 2009. REUTERS/Amit Dave/Files

Engineers of Oil and Natural Gas Corp (ONGC) work inside the Kalol oil field in Gujarat September 12, 2009.

Credit: Reuters/Amit Dave/Files

Related Topics

Stocks

   

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)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage