Reliance Industries and its UK partner BP have announced a joint investment of more than $5 billion to boost declining gas output at KG-D6 basis, India's largest offshore gas field. The investment would be spread over the next three to five years, the company said.
Falling gas production has been a big drag for RIL shares. The D6 block in the Krishna Godavari basin was expected to contribute up to a quarter of the gas supply in India, but output from the field hit a historic low last year. Gas output is the third biggest source of revenue for RIL after refining and petrochemical.
Brokerages have maintained a bullish stance on RIL since it posted its first profit increase after four quarters of declining returns. Nomura has a price target of Rs. 1,000 on the stock, while CLSA's has a target of Rs. 930.
(With inputs from Reuters)