India's Reliance Industries Q2 profit dips 6.55 pct

MUMBAI (AFP) - Indian refining and energy giant Reliance Industries Ltd said quarterly net profit dropped by 6.5 percent on Thursday as core refining margins fell following a tumble in global crude prices.

Net profit totalled 38.52 billion rupees (810 million dollars) in the quarter ended September 30, from 41.22 billion rupees a year earlier, Reliance, the country's largest private sector company, said in a statement.

The results were achieved in what the company controlled by billionaire Mukesh Ambani called a "challenging business environment".

Revenue rose five percent to 468.48 billion rupees during the second quarter.

The results were below market forecasts of net profit of 40 billion rupees.

Gross refining margins more than halved to six dollars a barrel from 13.3 a year earlier.

But the lower refining margins were offset by sales of gas from the KG-D6 field which started output in April.

"The timely completion of the new SEZ refinery and the oil and gas KG-D6 block and their safe ramp-up are noteworthy accomplishments," chairman Mukesh Ambani said in a statement.

In the quarter, total crude oil production from KG-D6 was 222,104 tonnes.

The Jamnagar refinery processed 27.63 million tonnes of crude, up from 16.34 million tonnes of crude oil processed a year earlier, a statement said.

Reliance shares fell 1.56 percent to 2,003.8 ahead of the earnings announcement.

Reliance, which has been expanding strongly into the retail sector, said its Reliance Retail division now operates 900 stores across India.

The results came amid a battle between Reliance Industries chief Mukesh Ambani and his younger brother Anil being played out in India's Supreme Court.

The feud stems from a family pact splitting the assets of the Reliance empire established by their father Dhirubhai, who died without a will.

Anil is demanding the honouring of a 2005 deal that would allow his company, Reliance Natural Resources Ltd, to buy gas from Mukesh's Reliance Industries at 44 percent below the government-set rate.

Mukesh insists the agreement brokered by their mother needed government approval and that the government price -- set after the family settlement was agreed -- must prevail.

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