The share price of Reliance Industries Ltd (RIL) gained almost 3 percent on Monday after the company and BP announced the commencement of production from the Satellite Custer gas field in block KG D6 off the east coast of India.
RIL and BP have been developing three deep-water gas developments in block KG D6 – R Cluster, Satellite Cluster and MJ – which together are expected to produce around 30 mmscmd (1 billion cubic feet a day) of natural gas by 2023, meeting up to 15 percent of India’s gas demand, RIL said in a regulatory filing.
The developments will each utilise the existing hub infrastructure in the KG D6 block. RIL is the operator of the block with a 66.67 percent participating interest and BP holds a 33.33 percent participating interest, RIL said.
The Satellite Cluster, according to RIL, is the second of the three developments to come onstream, following the start-up of R Cluster in December 2020.
Prakash Diwan of Altamount Capital Management said that the announcement is a positive for RIL's oil-to-chemicals (O2C) business.
"I think it is definitely going to have a significant positive impact on the stock and rerating could begin if the numbers which are expected on April 30 also tie in with some growth expectations that is there on margins particularity on GRM. I would believe the stock could start moving to that Rs 2,200 plus zone in the next couple of months," Diwan told CNBC-TV18.
At 12:50 pm, the shares of Reliance Industries were trading 2.24 percent higher at Rs 1,947.00 apiece on the BSE.
(Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)