New Delhi: Hardy Oil & Gas Plc agreed to a proposal by Reliance Industries Ltd., India’s biggest company by market value, to relinquish an offshore natural gas field after tests showed it isn’t viable.
Reliance, the operator, yesterday proposed to return the drilling license because the block’s gas potential is low and further exploration isn’t needed, Hardy said in a regulatory filing in London today. Hardy owns 10% of the block.
The partners discovered gas in June in a well in the KG-D9 block, located in the Krishna-Godavari basin off India’s east coast where Reliance operates India’s biggest gas deposit in a block known as KG-D6. Reliance is struggling to raise gas output in India because of technical difficulties, resulting in profit slumping by the most in more than three years in the quarter ended 31 March.
Tushar Pania, a spokesman for Reliance Industries, couldn’t be reached on his mobile phone for comments.
Reliance fell as much as 1.7% to Rs 723.70 and traded at Rs 734.15 as of 12:50 pm in Mumbai. The stock has gained 6% this year, compared with an 11% increase in the benchmark Sensitive Index.
Reliance sold 30% stakes in 21 oil and gas blocks in India, including KG-D6 and KG-D9, to BP Plc for $7.2 billion last year.