Nov. 10 (Bloomberg) -- Reliance Industries Ltd., India’s most valuable company, found oil in a block in the western state of Gujarat and is assessing the commercial viability of the discovery, which may help increase domestic fuel supplies.

Five wells were drilled in the 635 square kilometer area located in the Cambay basin, about 130 kilometers (80 miles) from Ahmedabad, the explorer and refiner said in a statement to the Bombay Stock Exchange today. Reliance owns 100 percent in the field, which was won in the fifth round of exploration bids held by India, according to the statement.

“Once the reserves get proven, then its value can be determined,” said Hitesh Kuvelkar, a Mumbai-based analyst at First Global Stockbroking Ltd. Further drilling is necessary to assess the significance of the find, he said.

Reliance, operator of India’s biggest gas field, didn’t take part in an auction of 70 oil and gas blocks this year, for which 36 bids were received. Concern that a lawsuit over a contract to supply gas from the offshore field will lead to increased state control of pricing may have deterred explorers.

Reliance shares gained 1.5 percent to 2,054.5 rupees in Mumbai trading, compared with a 0.4 percent decrease in the benchmark Sensitive Index.

India imports more than 75 percent of its crude oil requirements. The country’s crude oil output may rise 11 percent to 36.7 million metric tons this year, boosted by the start of production at a field in Rajasthan operated by Cairn India Ltd., the government said Nov. 5.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net.

Last Updated: November 10, 2009 06:07 EST