Mumbai, Oct. 17: Shares of index heavyweight Reliance Industries Ltd (RIL) fell nearly 4 per cent to Rs 833.20 on the Bombay Stock Exchange (BSE) after a report that the company had decided to suspend drilling across its entire oil and gas portfolio until a fresh plan was submitted to the government.
While RIL did not offer an official confirmation on this development, company sources said it was currently reviewing its oil and gas portfolios after it brought on board the more experienced UK-based BP Plc.
BP has picked up a 30 per cent participative interest in 21 oil and gas fields that RIL operates under a $7.2-billion deal struck in February. The government cleared the deal in August.
On Monday, global brokerage CLSA downgraded the RIL stock to outperform from buy and cut its target price from Rs 960 to Rs 950.
The brokerage cited weak gross refining margins (GRM) as a reason for the downgrade and cut the financial year 2012-13 earnings per share estimate by 2 to 4 per cent primarily to model a $0.2 to 0.3/bbl cut in GRMs. The brokerage said it did not expect a rebound in KG-D6 gas volumes till fiscal 2014.
In a related development, BP has reportedly written to the oil ministry saying that it is preparing to explore new areas of the KG-D6 basin. These new developments will have the potential to add large volumes of production capability, it added.
On Saturday, while announcing its results for the second quarter of this fiscal year, RIL announced a 23 per cent drop in production from the KG-D6 fields.
BP is also seeking approvals from the oil ministry to begin pre-development activities at the R series and satellite fields that surround the Dhirubhai 1 and 3 fields. These pre-development activities include geo-physical and geo-technical surveys, said a report.
Meanwhile, IT training company NIITs stock soared by nearly 20 per cent on the BSE in intra-day trades before closing 14 per cent higher at Rs 49.85 on news that the company had sold its UK unit.
NIIT said it had sold its UK-based subsidiary, Element K Corporation for $110 million to SkillSoft Corporation in an all-cash deal. NIIT acquired this UK unit with 700 employees in 2006 for $35 million.
Over the last few years, we have witnessed tremendous growth in our Managed Training Services (MTS) business. To grow, we have to be content and platform agnostic and this deal will help us attract a larger set of customers, NIIT CEO Vijay Thadani told a news agency.