Reliance awaits government nod for more gas investments

MUMBAI Fri Jan 17, 2014 9:32pm IST

A woman walks past a poster of Reliance Industries installed outside the venue of the company's annual general meeting in Mumbai June 7, 2012. REUTERS/Vivek Prakash/Files

A woman walks past a poster of Reliance Industries installed outside the venue of the company's annual general meeting in Mumbai June 7, 2012.

Credit: Reuters/Vivek Prakash/Files

Related Topics

Stocks

   

MUMBAI (Reuters) - Reliance Industries (RELI.NS) will hold off from more investment in its main gas block until the government approves its development plans, the energy company said on Friday, after reporting a forecast-beating quarterly profit.

Reliance, India's second-most valuable company and controlled by the country's richest man Mukesh Ambani, gets most of its revenue from a sprawling energy business. It operates the world's biggest crude oil refinery in western India, and also has interests in areas including retail and telecommunications.

The company operates the KG D6 block off India's east coast, where gas output has fallen sharply since 2010. Reliance and partner BP Plc (BP.L) have attributed this to geological complexities, but the regulator believes the slump in production is on account of not drilling enough wells.

Investor focus has been firmly on the small but high potential oil and gas business, after the government last month gave conditional approval for the company to raise gas prices from April 1.

"This is just the first step that will enable us to meaningfully go ahead with investment," Chief Financial Officer Alok Agarwal said of the recent gas price hike approval at a news conference after quarterly results were released.

"A lot of development plans are still with the government," he said. "It's a much more conducive environment now but until approvals come investments will not change significantly."

Reliance posted an average gross refining margin of $7.6 per barrel for the three months to December, compared with $9.6 in the same period the year before. Analysts expect tight refining margins in the near term as demand growth lags likely refining capacity additions in the United States, China and Middle East.

PROFIT BEATS ESTIMATES

In a surprise move, Reliance's telecommunications business unit this week applied to bid in a mobile phone spectrum auction starting next month, heating up competition.

Voice telephony, which is the mainstay for Indian mobile phone carriers, will be a service Reliance aims to offer, along with its yet-to-start high-speed 4G broadband Internet venture, Agarwal said, declining to give further details.

Reliance's net profit at 55.11 billion rupeesrupees forfor its fiscal third quarter to December was little changed from a year earlier. However, it beat the 53.4 billion rupees estimated on average by 14 analysts, according to Thomson Reuters StarMine.

Revenue for the quarter rose 10.5 percent to 1.06 trillion rupees, Reliance said. Revenue from refining, which accounts for more than 80 percent of the total, rose 10 percent to 954.32 billion rupees. Retail business revenue was up 38 percent to 39.27 billion rupees.

Reliance held cash reserves of $14.4 billion at the end of December and was debt free on a net basis, it said.

Shares in Reliance, valued at more than $46 billion, eased 0.2 percent ahead of the earnings in a Mumbai market that closed 0.9 percent down. The stock gained 6.6 percent last year, almost in line with the broader market index .NSEI.

(Writing by Devidutta Tripathy; Editing by Mark Potter)

FILED UNDER:
  • Most Popular
  • Most Shared

DEFENCE

REUTERS SHOWCASE

Power Theft

Power Theft

India to invest $4 billion to tackle power theft  Full Article 

Debt Funds

Debt Funds

India monitors foreign flows into debt funds, may tighten rules  Full Article 

Bulgari Back in India

Bulgari Back in India

CEO: we shouldn’t have left India so we’re back  Full Article 

 Hindu "Modi-fication"

Hindu "Modi-fication"

Fears grow about Hindu "Modi-fication" of education  Full Article 

Weak Credit

Weak Credit

Hard to hit tax revenue target, credit weak - Jaitley  Full Article 

China Rate Cut

China Rate Cut

China surprises with interest rate cut to spur growth  Full Article 

Gold Imports

Gold Imports

RBI cautious on response to gold import surge  Full Article 

Economic Corridor

Economic Corridor

China commits $45.6 billion for economic corridor with Pakistan  Full Article 

Overseas Funds

Overseas Funds

RBI says overseas borrowed funds can be parked with banks in India  Full Article 

Reuters India Mobile

Reuters India Mobile

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