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Thursday, June 21, 2012

Shares in Reliance Industries fell more than 3 percent on Thursday on renewed concerns over gas output after Canada's Niko Resources slashed the reserve estimate at the KG D6 gas block, in which both companies hold stakes.
The energy major has been under pressure from the government and regulators to raise output at the huge KG gas fields, off India's east coast, where production has declined for more than a year, forcing rising Indian imports of expensive liquefied natural gas (LNG).

The Canadian oil and gas producer late on Wednesday estimated that total proved plus probable reserves at the KG D6 block, as of March 31, has decreased to 1.93 trillion cubic feet.
The block had earlier been estimated to hold more than 9 trillion cubic feet (tcf) of gas.
Niko holds a 10 percent stake in the D6 block. Reliance holds 60 percent, while BP Plc has a 30 percent stake.
Last month, Reliance cut proven gas reserves at all its Indian blocks by a lower-than-expected 7 percent, but Wednesday's sharp cut by Niko has revived worries over the growth outlook that last year resulted in its share price dropping by a third.
 stock has risen just 3 percent in 2012, compared with a 9 percent gain in the main stock index. It lost a third of its value in 2011.
Gas output at Reliance's D6 block, off India's east coast, is projected to decline to 20 million standard cubic metres a day (mscmd) in 2014/15 from 28 mscmd in the current fiscal year.
Profits at the energy-based conglomerate have fallen for two straight quarters, and its shares now trade near a 3-year low.

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