Reliance Industries may hot up on gas find

The stock of Reliance Industries will be in focus this week. The company has announced a big natural gas discovery in the KG-D6 block, which will help arrest its falling output. RIL and its partner BP Plc of the UK encountered 155 m of gas pay zone in the first exploration well drilled on the block in more than five years. The upstream business was affected by a decline in gas production in the KG-D6 by 35-40 per cent. According to global brokerage Nomura, each 5 mmscmd reduction in average production reduces FY-15 earnings by Rs 2 a share. The company had, in fact, paid the Government $78.88 million as penalty for failing to meet its commitments under the production sharing contract over the last three years (2009-2012).