Niko Resources

Niko Resources was a Canadian oil and gas exploration and production company whose international portfolio became concentrated in India and, later, South and Southeast Asia. The company began with operations in the Western Canadian Basin, particularly Alberta and Saskatchewan, before developing an international strategy during the 1990s. Its first major overseas venture was the Hazira gas field in Gujarat, India, awarded in 1994 to Niko and Gujarat State Petroleum Corporation. Production from Hazira began in July 1995 and established India as the central geography of the company’s business. Niko expanded its Indian position through partnerships with Reliance Industries and participation in offshore exploration blocks. A 2002 discovery in the Krishna-Godavari basin, made with Reliance, was described as India’s largest natural-gas discovery and one of the world’s largest discoveries of that year. The company’s Indian portfolio subsequently included interests in the D6 and D4 blocks, the NEC25 block, the Hazira field, and other exploration acreage. Production from the D6 block began in September 2008 and transformed Niko’s production and revenue profile. By fiscal 2011, India accounted for most of the company’s revenue, with the D6 block contributing the majority of quarterly revenue cited in contemporary reports. The company broadened its geographic footprint in the 2000s. It entered Bangladesh in 2003, Pakistan in 2008, Madagascar in 2008, and Indonesia in 2008. It also established and expanded a position in Trinidad and Tobago. In 2009, Niko acquired a minority interest in a Trinidad block, and in November of that year it agreed to purchase Black Gold Energy for approximately $310 million. Completed in December 2009, the transaction increased Niko’s exposure to deepwater exploration in Indonesia. In 2010, Niko acquired Voyager Energy for approximately $37.6 million, a transaction completed in March that expanded its Trinidad portfolio. In June 2011, it acquired an interest in offshore block 5C in Trinidad and Tobago, making the country a more important area of investment. At the height of its international expansion, Niko reported exploration rights covering approximately 37 million acres across seven countries, although producing operations were concentrated in India and Bangladesh. Its reserves and production were heavily weighted toward natural gas. For fiscal 2011, average production was reported at roughly 49,127 barrels of oil equivalent per day, with natural gas accounting for the overwhelming majority. India supplied approximately 85.92 percent of revenue in that fiscal year, while Bangladesh represented a much smaller share. Contemporary analysis nevertheless noted that the company was investing substantially in Trinidad, Indonesia, Madagascar, and other frontier areas. Niko’s development was accompanied by legal and reputational problems. Between 2003 and 2006, its Bangladesh operations became associated with allegations concerning the acquisition of the Tengratila and Feni gas fields, payments to government officials, and an explosion at the Tengratila gas field. A Canadian investigation was initiated by the Royal Canadian Mounted Police in 2009. In 2013, an International Centre for Settlement of Investment Disputes panel accepted jurisdiction over claims brought by Niko Resources (Bangladesh) Ltd. against entities connected with the Bangladeshi government, including claims related to the gas-well blowouts and gas-delivery contracts. The company also exited Pakistan in 2013. Niko Resources was delisted from the Toronto Stock Exchange in March 2019. The available reference material does not establish the company’s current operating status, ownership, or successor structure.

Niko Resources originated as an oil and gas company operating mainly in the Western Canadian Basin, including Alberta and Saskatchewan. Its strategic direction began to change in the early 1990s, when it started seeking opportunities outside Canada. The company’s first major international venture was in India. On September 23, 1994, Niko and Gujarat State Petroleum Corporation were awarded rights connected with the Hazira gas field, located southwest of Surat in Gujarat. Production began at Hazira in July 1995. The project became the foundation of Niko’s later Indian portfolio and helped establish the company as an international upstream operator. From 1994 through 2006, most of Niko’s major investments were made in India. The company participated in exploration with Reliance Industries, and in 2002 a discovery in the Krishna-Godavari basin was reported as India’s largest natural-gas discovery and one of the largest worldwide discoveries of that year. Niko later held interests in several Indian blocks, including the D6 block, D4, NEC25, the Hazira field, and the Cauvery and North Surat areas. The D6 block was the company’s largest natural-gas discovery and began production in September 2008. Its output substantially increased Niko’s production and made India the company’s dominant source of revenue. Niko began expanding beyond India in 2003 by entering Bangladesh. In 2008, it was awarded four exploration blocks in Pakistan, obtained the Grand Prix block in Madagascar, and received four blocks in Indonesia. It also entered Trinidad and Tobago in 2009 through a minority interest in an exploration block. The company’s international expansion accelerated through acquisitions. Niko agreed in November 2009 to purchase Black Gold Energy for approximately $310 million; the transaction closed in December and gave Niko a larger role in deepwater exploration in Indonesia. In 2010, it acquired Voyager Energy for approximately $37.6 million. Completed in March, the deal added four Trinidadian blocks and expanded Niko’s local interests, including an interest in block 2AB. In June 2011, Niko acquired an interest in Trinidad and Tobago’s offshore block 5C and continued preparing exploration activity in block 2AB. Contemporary descriptions portrayed Trinidad as an increasingly important investment area, while India remained the main source of cash flow and production. Niko reported exploration rights covering approximately 37 million acres in seven countries, but actual producing operations were concentrated in India and Bangladesh. Its reserves and production were predominantly natural gas. In fiscal 2011, average production was reported at approximately 49,127 barrels of oil equivalent per day, around 94 percent of which was natural gas. India accounted for approximately 85.92 percent of revenue in that fiscal year. The company’s Bangladesh activities became the focus of serious criticism and legal action. Between 2003 and 2006, Niko was associated with allegations concerning the acquisition of the Tengratila and Feni gas fields, alleged improper payments to Bangladeshi officials, and an explosion at the Tengratila gas field. The company initially resisted some compensation claims but later compensated 620 affected families according to the cited reference material. The Royal Canadian Mounted Police opened an investigation into corruption allegations in January 2009. In 2013, an International Centre for Settlement of Investment Disputes panel ruled that it had jurisdiction over two claims filed by Niko Resources (Bangladesh) Ltd. against entities owned by or connected with the Bangladeshi government. The claims concerned the blowouts and contracts for the delivery of natural gas. Niko exited Pakistan in 2013. Its later corporate trajectory is not fully established by the supplied material, but the company was delisted from the Toronto Stock Exchange in March 2019. The available sources do not clearly identify its present operating status, ownership, headquarters, successor, or any continuing consumer-facing brand activity.

• 2019

  Toronto Stock Exchange delisting

  [1]Niko Resourcesen.wikipedia.org

  Niko Resources was delisted from the Toronto Stock Exchange in March.

• 2013

  Pakistan exit and ICSID jurisdiction ruling

  [1]Niko Resourcesen.wikipedia.org

  Niko exited Pakistan, while an ICSID panel accepted jurisdiction over claims connected with its Bangladesh gas operations.

• 2010

  Voyager Energy acquisition

  [1]Niko Resourcesen.wikipedia.org

  Niko completed the acquisition of Voyager Energy in March, adding Trinidad and Tobago exploration and production interests.

• 2009

  Black Gold Energy acquisition

  [1]Niko Resourcesen.wikipedia.org

  Niko agreed to acquire Black Gold Energy, strengthening its Indonesian deepwater exploration portfolio; completion occurred in December.

• 2008

  Expansion into Pakistan, Madagascar, and Indonesia

  [1]Niko Resourcesen.wikipedia.org

  The company received or acquired exploration interests in Pakistan, Madagascar, and Indonesia.

• 2008

  D6 block production begins

  [1]Niko Resourcesen.wikipedia.org

  Production began at India’s D6 block, subsequently becoming the principal contributor to Niko’s production and revenue.

• 2003

  Entry into Bangladesh

  [1]Niko Resourcesen.wikipedia.org

  Niko expanded its international operations into Bangladesh.

• 2002

  Krishna-Godavari basin discovery

  [1]Niko Resourcesen.wikipedia.org

  A discovery made with Reliance Industries in India’s Krishna-Godavari basin was described as the country’s largest natural-gas discovery and one of the world’s largest discoveries of the year.

• 1995

  First overseas production begins

  [1]Niko Resourcesen.wikipedia.org

  Production began at the Hazira gas field in July, establishing Niko’s first production outside Canada.

• 1994

  Award of the Hazira gas-field project

  [1]Niko Resourcesen.wikipedia.org

  Niko and Gujarat State Petroleum Corporation received rights connected with the Hazira gas field in Gujarat, India.

An internationally oriented upstream oil and gas company that used partnerships, exploration licenses, acquisitions, and production-sharing interests to build a gas-weighted portfolio centered on India and extending across South and Southeast Asia and the Caribbean.

• Natural gas and oil production · 2008

  D6 block

  The D6 block was an offshore Indian development in which Niko held a minority interest alongside Reliance Industries. Production started in September 2008. It became Niko’s largest producing asset and the principal driver of the company’s increased production and revenue during the period described by the reference material. The block also included the MA oil fields and a gas-processing plant.

• Natural gas production · 1995

  Hazira gas field

  Hazira was Niko’s first major international project. Located in Gujarat near Surat, the field was awarded to Niko and Gujarat State Petroleum Corporation in 1994, with production beginning in July 1995. It was described as a mature gas field and represented a smaller but strategically important part of Niko’s Indian production portfolio.

• Offshore exploration

  D4 block

  The D4 block is an offshore exploration area in the Orissa Basin. Niko held a minority interest while Reliance Industries held the controlling share. The block covered more than four million acres according to the cited material, with estimated reserves described as approximately twice those of the D6 block.

• Offshore exploration

  NEC25 block

  NEC25 is an offshore exploration block in the Bay of Bengal. Niko held a minority interest alongside Reliance Industries. The block covered more than three million acres in the period described by the reference material.

• Oil and gas exploration and production · 2009

  Trinidad and Tobago portfolio

  Niko built a portfolio of Trinidad and Tobago interests through direct acquisitions and the Voyager Energy transaction. It held interests in several oil fields and offshore blocks, including block 5C and block 2AB. The company characterized Trinidad as a growing area of investment during its international expansion.

• 2005

  Tengratila gas-field blowouts

  Two gas-well blowouts in Bangladesh generated environmental, compensation, and contractual disputes. The cited material states that 620 affected families were eventually compensated.

  Source

• 2003

  Bangladesh gas-field corruption allegations

  Niko’s acquisition and operation of the Tengratila and Feni gas fields became associated with allegations of improper payments to Bangladeshi officials during the 2003–2006 period. The Royal Canadian Mounted Police investigated corruption allegations beginning in 2009.

  Source

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• 2013

  Exit PakistanStrategy

  Background

  Niko had entered Pakistan in 2008 through interests in several exploration blocks.

  Action taken

  The company withdrew from Pakistan in 2013.

  Aftermath

  Pakistan was removed from the company’s operating footprint, while the available reference material does not specify the transaction terms or subsequent ownership of the blocks.

  Source

• 2011

  Increase investment in Trinidad and TobagoStrategy

  Background

  Niko was attempting to diversify beyond India while retaining India as its principal producing and cash-generating market.

  Action taken

  The company acquired an interest in offshore block 5C and advanced exploration plans for block 2AB.

  Aftermath

  Trinidad and Tobago became one of Niko’s more prominent international growth areas, although the available material does not establish the later production outcome.

  Block 5C acquisition value. $78.1 million (June 2011)

  Source

• 2010

  Acquire Voyager EnergyM&A

  Background

  Niko wanted to enlarge its Trinidad and Tobago presence and gain additional exploration and production interests.

  Action taken

  It acquired Voyager Energy in a transaction completed in March 2010.

  Aftermath

  Niko added four Trinidadian blocks and increased its exposure to the country’s upstream sector.

  Acquisition value. $37.6 million (March 2010 completion)

  Source

• 2009

  Acquire Black Gold EnergyM&A

  Background

  Niko sought to expand its international exploration portfolio and strengthen its position in Indonesia.

  Action taken

  It agreed to acquire Black Gold Energy in November 2009, with completion reported in December.

  Aftermath

  The transaction made Niko a more significant participant in Indonesian deepwater exploration.

  Acquisition value. $310 million (November–December 2009)

  Source

1. 1Niko Resourcesen.wikipedia.org