UPDATE 2-Reliance finds oil in western India; shares up
* First oil find in Cambay basin block in Gujarat state
* Firm sees find opening block's potential
* Raises hopes E&P ops may help offset weak refining margins
* Firm says reports of Ambani brothers settlement baseless
* Shares gain as much as 3.7 pct (Adds details on Ambani dispute, background, analyst comments)
MUMBAI, Nov 10 (Reuters) - Energy major Reliance Industries (RELI.BO) has made its first oil find in a western Indian block, boosting hopes the firm's oil and gas exploration business will help offset some of the weakness in the refining sector.
Reliance, India's biggest conglomerate, with interests in petrochemicals, refining, oil and gas exploration and retail, said it made the discovery in its onland exploratory block in the Cambay basin in Gujarat state.
Five wells had been drilled in the area, and the fifth well flowed at a rate of 500 barrels of oil per day (bopd), the company said on Tuesday.
"This discovery is expected to open future potential within the block," Reliance said in a statement.
The news boosted shares in Reliance, which has a market value of $71 billion, as much as 3.7 percent. By 0956 GMT, Reliance was trading up 1.7 percent at 2,058 rupees, in a weak Mumbai market .BSESN that had slid 0.3 percent.
The discovery also helps allay some of the worries over uncertainty surrounding a gas-pricing dispute.
Reliance, controlled by billionaire Mukesh Ambani, is embroiled in a high-profile legal battle over a deal to sell gas to Reliance Natural Resources (RENR.BO), led by Ambani's estranged younger brother Anil, at below the price set by the government. [ID:nBOM489932]
Media reports of a recent meeting between the brothers to settle the dispute are baseless, and the matter will be decided by India's Supreme Court, which is hearing the case, Reliance Industries said in a statement.
"The result of this battle will be a key factor determining the oil industry's future," said R.K. Gupta, managing director of Taurus Mutual Fund. "The issue of the pricing of oil and gas needs to be cleared."
HIGH STRIKE RATE Continued...
