The Hindu Business Line : Reliance down on Court order

Shares of Mukesh Ambani-controlled Reliance Industries Ltd slid 1.68 per cent to close at Rs 1,704.05 on the BSE on Friday from the previous close of Rs 1,733.15 in the wake of the Bombay High Court interim order barring the company from selling the gas produced at its KG Basin to any third party other than Reliance Natural Resources (RNRL) and NTPC for the first eight years.

In contrast, shares of RNRL, controlled by his brother Anil Ambani, were up, closing at Rs 35.05 on Friday against the previous close of Rs 34, clocking a 3.09 per cent climb.

The High Court interim order said that 81.6 MMSCMD of gas is to be earmarked for NTPC and RNRL, apart from RIL's captive use for the first eight years.

Analysts say investors see the Court order as a setback for RIL, as it has to settle for the original price it had agreed to sell gas to RNRL and NTPC, which is half the price ($4.58 per mmbtu) that emerged out of the recent bids it received from power and fertiliser companies.

With the cost of developing offshore oil blocks surging in the last couple of years, RIL was looking to get a higher price from what it had originally agreed with RNRL and NTPC. Almost every input in offshore oil production registered a price rise, including cost of hiring rigs. Rig hire charges, for example, have touched a whopping $ 300,000 per day.

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