Reliance finds oil in Cambay basin; shares up

By Pratish Narayanan

MUMBAI (Reuters) - Energy major Reliance Industries has made its first oil find in a Gujarat block, boosting hopes the firm's oil and gas exploration business will help offset some of the weakness in the refining sector.

Reliance, India's biggest conglomerate, with interests in petrochemicals, refining, oil and gas exploration and retail, said it made the discovery in its onland exploratory block in the Cambay basin in Gujarat.

Five wells had been drilled in the area, and the fifth well flowed at a rate of 500 barrels of oil per day (bopd), the company said on Tuesday.

"This discovery is expected to open future potential within the block," Reliance said in a statement.

The news boosted shares in Reliance, which has a market value of $71 billion, as much as 3.7 percent. By 0956 GMT, Reliance was trading up 1.7 percent at 2,058 rupees, in a weak Mumbai market that had slid 0.3 percent.

The discovery also helps allay some of the worries over uncertainty surrounding a gas-pricing dispute.

Reliance, controlled by billionaire Mukesh Ambani, is embroiled in a high-profile legal battle over a deal to sell gas to Reliance Natural Resources, led by Ambani's estranged younger brother Anil, at below the price set by the government.

Media reports of a recent meeting between the brothers to settle the dispute are baseless, and the matter will be decided by India's Supreme Court, which is hearing the case, Reliance Industries said in a statement.