Niko Resources is an India- and South East Asia-focused oil and gas exploration and production company that shares ownership of many exploration and development properties with Komodo Energy and Reliance Industries. Though it holds exploration rights to of land in 7 countries production currently only takes place in India and Bangladesh. Major acquisitions include a $310 million November 18, 2009 purchase of Black Gold Energy followed by the 2010 $37.6 million acquisition of Voyager Energy which expanded its presence in Trinidad. Most of the company's revenue comes from India, revenue from India rose 106% in the 12 months ended March 2011 compared to only 3.9% for Bangladesh. The company is investing heavily in Trinidad where in June 2011 it paid $78.1 million for offshore block 5c and is initiating exploration of another block. Though 58% of Niko's net exploration land position is in Indonesia exploration expenditure in India has increased from 1.4X higher than Indonesia in 2010 to 2.6X higher, and is forecast to increase to 12X higher in 2012 due to drilling the D4 and D6 blocks. In terms of gross land holdings about a quarter of all land is in India Between 2001 and 2006 the market value of the company grew elevenfold.
History
Niko Resources started out as an oil and gas company operating mainly in and around the Western Canadian Basin ; it wasn't until 1993 that the company showed interest in operating abroad. Its first venture into India involved the Hazira gas field which was awarded to it and the Gujarat State Petroleum Corporation by the government of India on September 23, 1994. First production abroad began July 1995 at Hazira. The Hazira acquisition was the first in a string of large investments in India made by Niko; between 1994 and 2006 all major company moves were made in India. In 2002 a natural gas exploration discovery it took part in turned out to be India's biggest and one of the world's largest for that year. In 2003 it expanded operations outside of India, beginning with Bangladesh. In 2008 started operations in Pakistan, Madagascar, Indonesia. Then in 2009 it purchased a 26% interest in a block in Trinidad, the block is held by a consortium of companies each with interests in it ranging from 29.25% to 35%. When it acquired Voyager Energy, operations in Trinidad were expanded. In 2013, a panel of the International Centre for Settlement of Investment Disputes held that it had jurisdiction to hear two claims by Niko Resources Ltd. against entities owned by the Government of Bangladesh relating to two 2005 gas well blowouts in Bangladesh and to contracts for delivery of natural gas. In March 2019 Niko Resources was delisted from the Toronto Stock Exchange.
Operations
Exploration capital expenditure in the first half of 2010 was spent mostly in India, Indonesia and Madagascar. In India ownership of all major properties is shared with Reliance Industries. The Cauvery block & NS block are 100% owned by Niko. As of March 2011 total 2P reserves are about 200 million barrels of oil equivalent 64% of which is natural gas; that represents a 24% overall decline since 2010. 98.6% of proved reserves is natural gas. Less than 2% of production/revenue comes from Canadian and Bangladeshi condensate. Currently only 2 of the 7 countries Niko has major operations in contribute revenue; The other five countries hold 41.8% of total assets by value. Though expansion outside of India is significant the country remains the most important source of cash flow and production with revenue per Mcfe of oil/gas production nearly twice that of Bangladesh. Production and earnings are forecast to fall significantly in 2012 due to lower gas production at India's D6, D4 and 9 blocks and new terminal maintenance costs from the D6 block. INDIA
Hazira: It is a matured gas field. The field complies with latest international safety standards like ISO & OHSAS. The field has recently completed cumulative 3 million safe working hours without LTI. The 50 km2 block is 33% owned by Niko and contributes approximately 3% of total revenue.
D6 block in India - Although a major natural gas producer the company has recently been negatively affected by 5 year fixed price contracts. The D6 block was the largest natural gas discovery in company history, currently it also includes a gas processing plant. Mining licenses expire in 2028. Contributed 85% of revenue in the quarter ended June 2011. Natural gas produced is purchased under long term contracts and sold on the spot market.
D4 Block - located in the Orissa Basin it covers over of offshore land. Reserves at D4 are estimated to be double those at D6.
Trinidad - five of the nine oil fields Niko owns interest in are controlling interests up from just two and deep horizon ) in 2009. In June 2011 Niko acquired a 25% interest in oil block 5C from Canadian company Sonde for $75.5 million cash making Trinidad a core area for the company. In Trinidad exploration licenses are issued as production sharing contracts.
KURDISTAN
Kurdistan - Niko has few interests in the Kurdistan region of northern Iraq. Mid 2010, drilling activities were going on & potential test is yet to be done.
MADAGASCAR
Madagascar - Few interests in Morondava basin.
Production
Averaged over the 2011 fiscal year production was 294,765 Mcf /d due entirely to new production from the D6 block, gas increased 22.3% to 278,060 Mcf /d. In the first half of 2010 daily production averaged about 50,751 boe/d up 61.67% when compared to the first half of 2009. Contribution from the D6 block in India is largely the reason for the higher numbers.
Criticism
Between 2003 and 2006 Niko was involved in a corruption scandal involving the acquisition of the $750 million Tengratila and Feni gas fields in Bangladesh. Additionally, the company accidentally caused an explosion and initially refused to pay for damages, although eventually did compensate the 620 affected families. During this time, they gave the minister responsible for overseeing compensation claims a Luxury SUV. Investigation into corruption allegations were made by the Royal Canadian Mounted Police in January 2009. Niko hired consultancy firm Stratum Developments Ltd which distributed bribes among Bangladesh government officials.
