Canadian natural resources firm Niko Resources Ltd, which had put its assets in India including its minority stake in Reliance Industries’ flagship offshore Krishna-Godavari oil and gas block in India’s east coast on the block, continues its talks to find buyers.
“Marketing efforts are underway for the potential sale of the company’s interest in the D6 Block in India along with other assets of the company and/or the entire company,” IT said.
The firm had earlier said it is looking to find buyers due to lower than expected hike in natural gas prices. It had appointed Jefferies as its financial advisor to assist it in finding a buyer for the assets.
Currently, Niko Resources owns 10 per cent stake in the KG-D6 block where a total of 20 oil and gas discoveries had been made and three of which are in production.
RIL, the operator of the block with 60 per cent stake, and Niko Resources were awarded the KG-D6 block in 2000. The remaining 30 per cent stake is held by BP plc of the UK.
Niko Resources also holds 10 per cent interest in gas discovery block NEC-25, off the Odisha coast, with RIL and BP.
Earlier, BP had written off some of the value of its investment.
In October, the Indian government announced to raise price to $5.61 per million British thermal unit (mBtu) from $4.2 mBtu, which was lower than $8.4 mBtu that the industry was expecting.
“The announced price for the period from November 2014 to March 2015 is a 33 per cent increase over the price received previously, but is lower than expected. In addition, there is uncertainty around the long-term natural gas price outlook in India,” Kevin J Clarke, chairman and interim CEO, Niko Resources, said in the statement.
The prices of natural gas will be determined on a semi-annual basis, according to the pricing guidelines announced in October last year. Prices will be calculated based on a volume weighted average of prices in the US, Canada, Europe and Russia based on the twelve-month trailing average price with a lag of three months. Notification of the gas price for the period of April 1, 2015 to September 30, 2015 is expected to come out in mid-March 2015.