Reliance Industries was up 0.39% to Rs 1,018 at 14:01 IST on BSE after the company issued clarification with reference to news item suggesting that the oil ministry slapped $250 million profit petroleum penalty on the company.
Meanwhile, the S&P BSE Sensex was up 158.93 points or 0.57% at 28,164.30.
On BSE, so far 2.67 lakh shares were traded in the counter as against average daily volume of 2.60 lakh shares in the past one quarter. The stock hit a high of Rs 1,023.15 and a low of Rs 1,015.35 so far during the day. The stock had hit a 52-week high of Rs 1,089.50 on 15 January 2016. The stock had hit a 52-week low of Rs 819 on 24 August 2015. The stock had underperformed the market over the past one month till 17 August 2016, advancing 0.14% compared with 0.61% rise in the Sensex. The scrip had also underperformed the market in past one quarter, gaining 4.51% as against Sensex's 8.66% rise.
The large-cap company has equity capital of Rs 3242.95 crore. Face value per share is Rs 10.
Reliance Industries (RIL) clarified during market hours today, 18 August 2016, that the issue is an ongoing dispute on disallowance of cost recovery by the Ministry of Petroleum and Natural Gas (MoPNG). The dispute started in 2011 and is currently under arbitration in accordance with provisions of the Production Sharing Contract (PSC). The parties to arbitration are Contractor Group (RIL, BP and NIKO) and Government of India (through MoPNG).
Every year, based on its own interpretations of the PSC and assumptions (with which the Contractor Group does not agree), MoPNG revises the total cost it proposes to disallow and consequently aggregates the figure with the figures of the previous years. It also demands additional profit petroleum (in total including previous year claims as well) as GoI share.
Upto financial year 2013-2014, the cost recovery proposed to be disallowed was $2.376 billion and consequent demand of Government of India (GoI) share of additional profit petroleum of $195.3 million on cumulative basis. On 3 June 2016, the company received a revised claim upto year 2014-2015 with a disallowance of $2.756 billion on cumulative basis and consequent demand of Gol share of additional profit petroleum of $246.90 million, also on cumulative basis. The number mentioned in the headline of the news item is a cumulative figure since commencement of the dispute.
RIL also clarified that GoI has already collected gross $81.7 million in Gas Pool Account, towards the aforesaid claim. RIL reiterated that all claims made by GoI are denied by the Contractor Group and currently part of an ongoing arbitration.
On consolidated basis, RIL's net profit rose 18.1% to Rs 7113 crore on 15.2% decline in net sales to Rs 64990 crore in Q1 June 2016 over Q1 June 2015.
RIL is a diversified firm having presence in oil exploration, petrochemicals, retail and telecom sectors.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
