RIL shares zoom 5% on KG find; game-changer, say brokerages

Mukesh Ambani-led Reliance Industries Ltd shares zoomed by more than 5% to Rs 828 on the Bombay Stock Exchange on Monday, helping take the benchmark Sensex up, as at least five leading global brokerages called it a game-changer. HT reports.

Mukesh Ambani-led Reliance Industries Ltd shares zoomed by more than 5% to Rs 828 on the Bombay Stock Exchange on Monday, helping take the benchmark Sensex up, as at least five leading global brokerages called it a game-changer.

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Goldman Sachs, Barclays, UBS, Bernstein Research, Deutsche Bank and HSBC said that the find will help reverse a falling trend in gas output.

RIL had, on Friday, had announced a major gas find more than four kilometres below the sea bed and two-kilometres directly underneath the currently producing D1&D3 field in the KG-D6 block off the east coast.

The rally in RIL shares added Rs 13,000 crore to investor wealth on Monday and the company ended the day with a market cap of Rs 2.3 lakh crore.

The partnership between RIL and BP is starting to pay off, Bernstein Research in a note. "The first test of deep syn-rift Mesozoic sediments within the KG-D6 block has yielded what could be one of the largest (2 trillion cubic feet) gas discoveries in offshore India for several years."

According to independent estimates, the Cretaceous section of KG-D6 block may hold 9 trillion cubic feet (tcf) of gas and 1.2 billion barrels of inplace oil reserves.

While Goldman Sachs termed the discovery significant, HSBC said the new find, which was named D-55, can produce 8-10 mmscmd of gas along with about 10,000 barrels per day of condensate.