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RIL, BP get nod to acquire Niko’s 10% stake in gas block

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Source: PTI
Saturday, January 27, 2018
NEW DELHI: The government has approved Reliance Industries and British energy giant BP plc acquiring their cash-strapped partner Niko Resources' 10% stake in gas discovery block NEC-25 in the Bay of Bengal. "Assignment of Niko's participating interest (10%) to RIL and BP approved by Government of India," RIL said in an analyst presentation on third-quarter earnings. 

Niko had in mid-2015 chosen to withdraw from the NEC-25 block and relinquish its interest to the remaining stakeholders. RIL is the operator of the block with 60% interest while BP of the UK has the remaining 30% stake. The 10% stake has been split between RIL and BP in proportion to their equity stake. 

Gas discoveries in North-East Coast block NEC-0SN-97/1 (NEC-25) hold recoverable reserves of 1.032 trillion cubic feet. 

The Canadian company has been facing cash problems and had even put up for sale its interest in NEC-25 as well as 10% stake in RIL's Krishna Godavari basin oil and gas producing block KGDWN-98/3 or KG-D6. It could not find a buyer though. 

Last year, RIL had stated that the block oversight panel, called Management Committee (MC), has reviewed the declaration of commerciality (DoC) of gas find D-32 in the block. 

MC is headed by upstream regulator, the Directorate General of Hydrocarbons (DGH), which had previously refused to give formal recognition to the D-32 and D-40 discoveries in the block due to absence of its mandated confirmatory tests. 
 
The DGH had also previously not approved a $3.5 billion plan for developing gas discoveries in block NEC-25 in the absence of its prescribed Drill Stem Test (DST) to confirm two of the finds. 

Thereafter, the partners decided to go for the DST test on one of the finds and relinquish or give up the other. 

The presentation did not say if the partner have submitted a revised field development plan. 

RIL in March 2013 had submitted a $3.5 billion Integrated Field Development Plan for producing 10 million standard cubic metres per day of gas from the discoveries D- 32, D-40, D-9 and D-10 in NEC-25 by mid-2019.  


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