RIL, ONGC firm up as govt eases rules for gas field development

Oil exploration shares such as Reliance Industries and ONGC were trading marginally in an otherwise weak market after the government announced a policy for development of oil and gas discoveries.

There are three options to choose from. The first is an option to relinquish the block. Another is to develop the discovery, after conducting a Drill Stem Test (DST); if this is not done on time, half the DST cost will be disallowed. And, even if done on time, the cost recovery is to be limited to $15 million (Rs 94.8 crore).

"The third is to develop the discoveries without conducting a DST, in a ring-fenced manner," the government said in a statement.

If the contractor does not opt for any one of the three within two months, the area of the discovery will be automatically considered as relinquished.

Reliance Industries opened at Rs 852 and touched a high of 854. At 9:40, over 380,000 shares were traded on both the stock exchanges.

ONGC opened at Rs 307 and touched a high of Rs 308. At 9:40, over 350,000 shares were traded on both the stock exchanges.