Niko Resources has exited the KGD6 block, settling its arbitration with Reliance Industries and BP for $36 million and letting the two partners take over its 10% stake in the block, said the Canadian company’s statement.
Niko had invoked arbitration after Reliance and BP asked the Canadian oil and natural gas company to exit the KGD6 block as it had defaulted on cash call. RIL and BP then owned 60% and 30% participating interest respectively in the KGD6 block. Following the settlement, their stakes have risen.
“Niko had entered into a settlement agreement with Reliance and BP under which it agreed to withdraw from D6 production sharing contract 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,” Niko said.
The settlement agreement is subject to certain conditions precedent including the execution of the amendment to the D6 PSC, it added.
“An amendment to the production sharing contract for the D6 Block in India has been executed, reflecting the assignment of the 10% interest previously held by the Company’s indirect subsidiary, Niko (NECO) Ltd (“Niko NECO”), to the remaining interest holders in the block, Reliance Industries Ltd (“Reliance”) and BP Exploration (Alpha) (“BPEAL”),” Niko said.
The net proceeds from the transaction are to be distributed solely to lenders, the company said.
