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Reliance Industries Ltd and BP Exploration (Alpha) Limited (BPEAL) has bought its estranged partner Niko Ltd’s 10 per cent stake in the KG-D6 for $36 million.
Niko (NECO) Ltd, the indirect subsidiary of Niko Resources Ltd, had entered into a settlement agreement with Reliance and BPEAL under which it agreed to withdraw from D6 production sharing contract (PSC) and settle its arbitration case filed under the rules of the London Court of International Arbitration in December 2017 in exchange for a settlement amount of $36 million, subject to adjustment prior to closing, the company said in a statement.
The settlement agreement is subject to certain conditions precedent including the execution of the amendment to the D6 PSC, it said adding that the proceeds will be used to pay lenders’ dues.
Following this, Reliance's stake in KG-D6 has gone up to 66.67 per cent from the previous 60 per cent and that of BP to 33.33 per cent from 30 per cent.
Niko has been scouting for a buyer for its 10 per cent stake in KG-D6 or securing financing for its share of the $5 billion R-Cluster, Satellite Cluster and MJ development projects in the block after defaulting on lenders’ dues.
Since these attempts were unsuccessful, it defaulted on making payments for its share of development cost of the D6 block, thereby attracting a default notice from the other partners.
In December 2018, Reliance and BP sought Niko’s exit from the KG-D6, against which Niko filed for arbitration.
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