Mumbai: The country's oil major Reliance Industries and UK-based BP have acquired a 10 per cent stake of Niko Resources in the KG-D6 block of the offshore sector. The company's move has also received approval from the government. Nico Resources was the partner of Reliance Industries and UK's BP in this block. Reliance and BP have taken Niko's stake in proportion to their existing stake in the block. Following this acquisition, Reliance's stake in KG-D6 increased to 66.67 per cent from the earlier 60 per cent. So BP's share increased from the current 30 per cent to 33.33 per cent.

In fact, Niko has failed to find potential buyers for its 10 per cent stake in KG-D6 or lenders for funding for its $ 5 billion stake in the R packages, adjoining packages and MJ development projects. Earlier, the company had defaulted in returning loans to lenders. This led to the company not being able to pay its share in development costs in early October 2018. According to sources, Reliance, the operator of KG-D6 block, gave notice to the company immediately after the lapse.

Under the terms and conditions of the joint operating agreement between the partners in the KG-D6 production partnership contract, the entity concerned (the defaulting entity) will not have the right to an income share in the event of continued defaults. According to sources, Niko has given a notice of arbitration against the acquisition. But the ministry cleared it, bypassing it.

Also Read: 

GST Council meeting disappoints auto and biscuit sector, hotel industry gets relief

Air India took this step to resolve debt

Government notified decision on FDI, read report

RBI panel gave this suggestion to the government for the development of agriculture sector