Niko announcement about KG-DWN-98/3 upsets Reliance

Vol 8, PW 3 (05 May 04) News in Brief

Tension is mounting between Reliance and Niko Resources, its 10% partner in KG-DWN-98/3.

We understand Reliance is angry with Nikos 31st March announcement to the Toronto Stock Exchange of two more gas discoveries: K-1 and K-2. Niko had no business to make this announcement, a source tells PETROWATCH.

No finality has been reached about the size of the discoveries. Given a choice, Reliance would gladly like Niko out of this block as it did from the 10 other NELP-I blocks in which both were partners.

But Niko wants to stay in and by meeting all cash calls promptly is giving Reliance no official cause for complaint. Reliance is stuck with Niko on this block and they dont know what to do, reveals a source.

Reliance has made offers to buy Nikos stake at KG-DWN-98/3 but Niko, is asking for anything between $200m and $300m which Reliance is unwilling to pay.