Shares of India’s largest company, Reliance Industries, have plummeted after a dramatic cut in estimates at its leading hydrocarbons reservoir. Canada’s Niko Resources, which is RIL’s partner in its flagship KG D6 field, has reduced its estimate to just 1.93 trillion cubic feet from the earlier 9 trillion cubic feet. Niko owns 10% of the block, while RIL holds 60% and BP the remaining 30%. Despite the Sensex rising 0.8%, news of the revised estimate sent shares of RIL tumbling 2.58% on the BSE to718.60.
Once a lucrative asset for RIL, the D6 block has seen output steadily falling. What’s more, the company remains mired in a dispute with the government about its compensation for development costs. RIL’s alliance with BP is meant to stem the decline in production, though the new estimate from Niko could make that difficult.
In other news, it’s not been a good day for India’s cement industry either. A clutch of top companies in the industry face a steep fine for allegedly colluding to raise prices. The Competition Commission of India has fined 11 cement companies a total of $1.1 billion. It says they kept production artificially low to create shortages. The companies being fined include the Aditya Birla Group’s UltraTech Cement, ACC, Ambuja Cement and the Indian arm of French company Lafarge. News of the CCI’s decision came after markets closed for the day. But industry watchers had been anticipating the penalty for some time now.
Moving on, India’s monsoon seems to be going through something of a dry spell, but the met department says farmers need not worry yet. On Thursday, the India Meteorological Department said that while the monsoons were behind schedule, the delays were normal. Monsoons are crucial for farmers across India, and in turn, for the country’s economy. So far, rains have been 26% below average since the beginning of the monsoon season.