| Striking gold
Mumbai, Nov. 25: After the spectacular gas discovery in the Krishna-Godavari basin by Reliance, hopes have now gone up that its actual find may surpass the initial estimate of 7 trillion cubic feet (tcf).
“There is an optimism that the actual figure may be in excess of the initial estimate made by Reliance. Even the Director General of Hydrocarbons has not ruled out such a possibility,” a broker said.
The optimism propelled the scrip on the bourses today, taking it to a day’s high of Rs 291.70 from an opening of Rs 285. Profit booking, however, evaporated much of these gains and the stock finished at Rs 287, a rise of Rs 2.65 or 0.93 per cent over its previous finish. The share surged by more than 20 per cent after the company confirmed its find late last month.
Reliance had earlier confirmed its gas discovery in the Krishna Godavari basin, with chairman Mukesh Ambani informing shareholders that the volume of natural gas is in excess of seven tcf, equivalent to 165 million tonnes of oil.
Reliance is now looking at delivering almost 40 million cubic metres per day of gas to consumers in three to four years, after obtaining the necessary approvals. Based on the recoverable reserves of five trillion cubic feet, gas availability in the country is projected to increase by almost 60 per cent.
Oil sector analysts estimate that on a conservative basis, the discovery would add at least Rs 7,500 crore to its topline and close to Rs 2,000 crore to its bottomline by 2007. Analysts say Reliance is on its way to dethrone Oil and Natural Gas Corporation in gas production if it succeeds in notching up a couple of more such discoveries.
Reliance has 177,000 square kilometre of exploration acreage in 23 onshore and offshore blocks. This is likely to go up further by 100,000 square kilometres. All eyes are now on the third round of the New Exploration Licensing Policy and expectations are that Reliance could bag close to 10 blocks. The company is also estimated to make a big strike in at least two blocks.
Ambani had then added that Reliance will make significant investments in these exploration and production blocks in the next two or three years.