(Corrects percentage in first paragraph, year-earlier profit in second.)
April 23 (Bloomberg) -- Reliance Industries Ltd., the operator of
India's biggest natural gas field, said fourth- quarter profit
increased 30 percent as higher sales of the fuel countered lower
profit from turning crude into products.
Net income in the three months ended March 31 rose to 47.1 billion
rupees ($1.1 billion), or 14.40 rupees a share, from 36.3 billion
rupees, or 11.5 rupees, a year earlier, the Mumbai- based energy
explorer and refiner said in an e-mailed statement today. That
compares with a 51.4 billion-rupee mean profit estimate of 14 analysts
surveyed by Bloomberg News.
Reliance, controlled by Asia's richest man, Mukesh Ambani, increased
output from the KG-D6 field off India's east coast as accelerating
economic growth spurred demand from power and fertilizer producers.
The explorer acquired shale gas assets in the U.S. from Atlas Energy
Inc. this month to diversify the risk of investing in India where it
is fighting a lawsuit over supply and pricing of gas from the field.
"Refining margins are below expectations," Saeed Jaffery, a Mumbai-
based analyst at Ambit Capital Pvt., said today. "Refining will
continue to be under pressure for at least another quarter."
Reliance, which has the biggest weighting in the benchmark Sensitive
Index, rose 1.2 percent to 1,088.20 rupees in Mumbai, valuing the
company at $80 billion. The stock has advanced 23 percent in the past
year, trailing the 59 percent increase in the Sensitive Index.
The company, India's biggest by market value, also operates chemical
plants and fuel-retail outlets. Pretax profit from refining fell to
19.9 billion rupees or 34 percent of the total, compared with 49
percent a year earlier. The company operates the 1.24 million barrel-a-
day Jamnagar refining complex in the western Indian state of Gujarat.
Net sales in the quarter more than doubled to 575.7 billion rupees,
Reliance said in the statement.
Reliance earned $7.50 on every barrel of crude it turned to fuels in
the quarter, the company said. That compares with $9.90 a barrel
reported a year earlier.
Global refining margins, or earnings from processing oil into fuel,
rose to $3.08 a barrel in the three-month period from $1.49 a barrel
in the quarter ended Dec. 31, according to BP Plc data.
BP, Europe's biggest oil company, said refining margins will
"remain depressed." The company's adjusted earnings rose 68
percent in the three months ended Dec. 31, falling short of estimates.
PetroChina Co., the world's biggest company by market value, reported
lower profit that missed estimates in the year ended Dec. 31 after oil
prices declined. Chairman Jiang Jiemin expects profit to improve this
year as domestic consumption rises and it plans to boost overseas
Crude oil has gained 69 percent in the past year as economies emerge
from the recession. Crude for June delivery was at $83.64 a barrel,
down 6 cents, in electronic trading on the New York Mercantile
Exchange at 12:09 p.m. London time.
Reliance has notified the Directorate General of Hydrocarbons,
India's oil and gas regulator, of four more discoveries in the KG-D6
gas field that are commercially viable, two people familiar with the
matter said April 9. The field started production in April last year.
Peak output of 80 million cubic meters a day may be reached at the
field by mid-2010, the government said in December. That will double
the availability of gas in India and make Reliance the biggest
producer of the fuel in the South Asian nation. Output is currently
about 64 million cubic meters a day, P.M.S. Prasad, executive
director, said April 6.
Hardy Oil & Gas Plc, Reliance's partner in two other gas fields in
India's Bay of Bengal, this month cut by 51 percent the prospective
resource estimate in the KG-D9 field.
Reliance agreed to buy a $1.7 billion stake in natural-gas properties
from Atlas Energy, joining other international energy companies
betting on growing fuel output in U.S. shale formations, the company
said April 9. It expects to spend $5 billion on the venture over 10
years, according to Chief Financial Officer Alok Agarwal.
Acquiring assets overseas may help Reliance hedge the risk of
investing in India. Reliance is awaiting the verdict of India's
Supreme Court in a lawsuit over the sale of gas from the KG-D6 field
in the Bay of Bengal.
Anil Ambani, Mukesh Ambani's estranged brother, wants Reliance
Industries to supply gas to his company at a rate agreed when the
family business was split. Reliance says it can't sell the fuel at
less than the rate set later by the government. The court reserved
judgment after arguments concluded on Dec. 18.
Reliance's attempts to buy LyondellBasell Industries AF out of
bankruptcy was rejected in March, and the company missed out on an oil-
sands block in Canada owned by Value Creation Inc. Reliance has said
it may buy oil fields in the Gulf of Mexico and Brazil.