Niko sells Hazira stake to Sun Petrochemicals

Vol 20, PW 7 (15 Dec 16) People & Policy

After operating the Hazira gasfield for 22 years Canada's Niko Resources will soon exit and hand over its minority 33.33% stake to billionaire Dilip Shanghvi's Sun Petrochemicals.

Niko confirmed the deal on December 9 in a one-page letter to staff at its Indian headquarters at the former royal city of Baroda in Gujarat. "Niko wishes to announce that on December 7, 2016 it signed a pact with Sun Petro, a subsidiary of Sun Petrochemicals, to transfer our 33.33% participating interest in Hazira to them," reads the letter, seen by this report.

"The proposal will now be put to the government of India for consideration and approval." Until government approval is in hand, Niko remains operator. "We will update you on an ongoing basis as progress is made towards formal approval," adds the Niko letter to staff.

Unclear is how much Sun has agreed to pay Niko but it is also believed to want 67.33% held by GSPC where its present oil and gas chief Padam Singh was once director operations. Niko's "definitive agreement" with Sun is a "preliminary document" with a series of "conditions precedent" and formal government approval is expected within three to six months.

Niko is also trying to sell its 10% in the Reliance-operated eastern offshore producing KG-D6 block where BP holds 30%. Investment banker Jefferies has issued "initial inquires" to interested buyers and expects offers by March 2017.

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