Reliance, BP Take Over Niko's Stake in Indian Gas Block: Press
India’s Reliance Industries and its partner BP have taken over Niko Resource’s 10% stake in offshore KG-D6 block after the Canadian firm defaulted on paying for its share of gas field development cost, Press Trust of India reported September 15.
Sources have told the news agency that the Indian oil ministry has given ‘unconditional’ nod to Reliance and BP for the takeover. Reliance and BP split Niko’s share in proportion to their existing shareholding in the block. Subsequently, Reliance’s stake in KG-D6 has gone up to 66.67% from 60% while BP’s stake has increased to 33.33% from 30%, the news agency reported.
Niko, which defaulted on payment of loans to its lenders, has been unsuccessful in seeking a possible buyer for its 10% in KG-D6 block offshore India’s east coast or securing financing for its share of the $5bn R-Cluster, Satellite Cluster and MJ development projects in the block. This led to the company defaulting in making payments for its share of development cost in early October 2018, the news agency reported.
In July, Reliance said the KG-D6 block produced 5.66bn ft3 of natural gas in the three months to June (Q1 2020), down 57% year-on-year owing to shut down of MA field.