indo-asian news service, New Delhi, June 14: Reliance Industries’ consortium partner Niko Resources of Canada has extended by over three months its search for a buyer of its stake in RIL’s eastern offshore KG-D6 gas block to pay off debt.
“The Board of Directors of Niko now believes that it requires more time to determine if the sales process will be successful or, if not, to develop an alternative plan with the assistance of its advisors and stakeholders to achieve the best results for the stakeholders of the company,” Niko has said in a filing to the Toronto Stock Exchange.
It said it has now reached an understanding with lenders to extend the search till September 15.
Niko had in February announced it intended to sell-off its 10 per cent stake in the KG-D6 block to square a $340 million debt. The company had earlier planned to sell off the interest by April 30 but later extended it till May 31.
The company has earlier blamed a lower-than-expected gas price announced by the Indian government for its decision to sell its stake in the KG-D6 block.
The government had in October announced a new natural gas price of $5.61 per million British thermal unit, raising it from $4.2.
“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 Niko Resources had said.
In April, Niko had said that RIL’s gas discovery MJ-1 may hold 1.4 trillion cubic feet of gas resources, roughly half of the reserves in the KG-D6 block’s main gas fields.
Reliance Friday sought an early revision of gas prices and urged the government to quickly resolve what it termed as “legacy issues” over its production-sharing contracts for discovered hydrocarbons.
Announcing the new gas price October last, the government had said the premium to RIL for its gas discoveries being under arbitration, the company would continue to be paid the earlier price of $4.2 per unit.
