MUMBAI, India (AP) — India's Reliance Industries reported a 5.7 percent slide in profits in the July to September quarter from a year earlier, as it scaled back investment in the country's largest oil and gas fields.
Net profit was 53.8 billion rupees ($1.0 billion) on sales of 932.7 billion rupees ($17.6 billion) in the quarter, the company said Monday, in line with estimates.
It was the fourth consecutive slide in quarterly profit for Reliance, according to financial information provider FactSet. Analysts polled by FactSet had forecast net income of 53.9 billion rupees ($1.0 billion) on sales of 906.5 billion rupees ($17.1 billion).
Reliance, which runs the world's largest refining complex, reported gross refining margins of $9.5 per barrel for the September quarter, in line with estimates, up from $7.6 a barrel during the prior quarter.
Reliance, which produces gas in partnership with BP, said it won't spend an additional $3 billion on its most productive fields in the Bay of Bengal, off India's eastern coast, where it is able to extract less gas than expected.
Reliance plans to scale back capital expenditure in its two most productive fields to $5.9 billion, down from a 2006 plan of $8.8 billion.
The company has produced close to 2 trillion cubic feet of gas from the fields in the last three years and can extract an additional 3.1 trillion cubic feet, about 5 trillion cubic feet less than initially predicted.
"We are going to present to the government a revised development plan," spokesman Tushar Pania said Monday. "We are not going to spend this money now."
Analysts said the scale-back was also probably related to an ongoing struggle with the government over setting natural gas prices.
Reliance has been pushing the government to triple the price cap on natural gas sales.
"We have not seen any resolution so far," said Angel Broking analyst Bhavesh Chauhan. "There is no clarity whether they'd get a good rise in the price of gas."
Reliance stock rose 0.5 percent in Mumbai trading ahead of the earnings announcement, beating the benchmark Sensex's 0.2 percent rise.