Niko dispute with Gujarat turns nasty

Vol 4, PW 22 (16 Dec 00) People & Policy

Dirty linen is never a pretty sight.

Especially if you are foreign oil company that likes to maintain a low profile. Niko Resources of Canada, operator of the Hazira gasfield in Gujarat, and 10% partner with Reliance for a dozen exploration blocks, is such a company.

For long we heard little about Niko, as it quietly went about its business churning profit from one of the most prolific gasfields in India. Media-shy and low-key, Niko's name is today splashed across the Indian press.

Its minor tussle with partner Gujarat State Petroleum Corporation over rights to a 36-inch pipeline from Hazira to Mora has turned into an ugly battle for control of the Hazira gasfield. This report has seen a furious exchange of letters between Gujarat Petroleum, Niko's Calgary office, local officials in the petroleum directorate, the Directorate General of Hydrocarbons in Delhi, Essar Steel and, surprisingly enough, Gaz de France.

To say this dispute has turned nasty is an understatement. It's become vicious.

Tempting as it is for a publication like ours to support the "poor foreign company trying to earn an honest buck", we refrain from taking sides. By now Niko must have realised it was foolish to drag Gaz de France into this messy story, and with time Gujarat Petroleum will realise no one is interested in the intricacies of its argument to strip the Canadian company of operatorship.

With India set to auction 25 exploration blocks by December 31st, this is the sort of publicity it can do without.