Niko Resources Exits India's KGD6 Block

Canada’s Niko Resources has sold its 10% stake in KGD6 block off Indian east coast to the remaining stakeholders in the block, Reliance Industries and BP, for $36mn, it said December 27 in a statement.

Niko NECO, a unit of Niko, entered into a settlement agreement with Reliance and BP under which it agreed to withdraw from KGD6 production sharing contract (PSC) and settle its arbitration case filed under the rules of the London Court of International Arbitration in exchange for a settlement amount of $36mn, the company said.

Niko had defaulted on cash calls and accordingly default notice was issued as per the provision of the joint operating agreement. In December 2018, Reliance and BP sought Niko’s exit from the KG-D6, against which Niko file for arbitration.

Niko said the settlement agreement is subject to certain conditions precedent including the execution of the amendment to the PSC. It plans to use the proceeds to pay lenders’ dues.

Post this deal, Reliance’s stake in KG-D6 block will go up to 66.67% from the previous 60% while BP’s interest will rise to 33.33% from 30%.