Fresh Niko move to sell its stakes

Canadian Niko Resources has moved afresh to sell its global stakes including those in Bangladesh as it appointed an international firm last week to look after these issues, said sources.
It has engaged Jefferies LLC, an American investment bank and institutional securities firm, as its financial adviser to assist the company in pursuing strategic alternatives that include the sale of assets, a merger or other business combination.
The American firm, headquartered in New York, will also advise Niko over the outright sale of the company, a refinancing of its existing debt with replacement debt, or some combination thereof, a company insider said.
Niko Resources is currently in disputes with state-owned Petrobangla, the parent gas entity of the country, over payment against its gas sales from the onshore Feni gas field and compensation following two consecutive blowouts in the Niko-operated onshore Chhatak field in northeastern region.
The disputes have been taken to the International Centre for Settlement of Investment Disputes (ICSID), and currently awaiting final verdict.
The Canadian company was earlier in talks with Kuwait Foreign Petroleum Exploration Company (Kufpec), a subsidiary of Kuwait Petroleum Corporation, over sale of its stake with the currently producing Bangora gas field of onshore block-9.
In May last year Kufpec had sought approval from state-owned Petrobangla to go ahead with the purchase.
But Petrobangla then said that it had no objection about handing over of Niko's share in Block 9 to Kufpec provided Kufpec takes liability of the gas field blowouts.
Neither Kufpec nor Niko approached Petrobangla for selling its stakes since then.
Earlier in March last year, Niko had announced that it was in advance negotiations with two separate third parties for the sales of certain non-core assets for combined sales proceeds of US$157 million.
The company was working towards signing of definitive sale and purchase agreements by April 30, 2013, it had said then.
Niko did not say what specific assets were up for sale or who the purchasers were, adding that further details would be provided to the market as these transactions progress.
Execution of the sale and purchase agreements will be subject to completion of final due diligence and approval by the respective boards of directors of the parties, it had said.
Closing of the transactions will be subject to host government's permission and regulatory approvals.
In addition to the above transactions, the company is progressing in its negotiations with various third parties regarding farm-outs and other non-core asset dispositions, with offers on certain of these expected in the next few weeks, Niko Resources had said.
Based in Calgary of Canada, Niko has operations in India, Bangladesh, Indonesia, Madagascar, Pakistan and Trinidad.
In Bangladesh, Niko Resources has 60 per cent stake in onshore block 9 where Bangora gas field is producing around 100 million cubic feet per day (mmcfd) of gas.
Singapore's KrisEnergy is the operator of block 9 with 30 per cent stake, while state-owned Bangladesh Petroleum Corporation Ltd (Bapex) has 10 per cent carried interest stake.
In addition, Niko was the operator of onshore Feni gas field, where it has 80 per cent stake with remaining 20 per cent to Bapex.
Gas production from Feni field remained suspended since May 2010 over payment and compensation disputes with government.
The company had started supplying gas from the field in November 2004.
Before suspending production, Niko was supplying around 2.0 mmcfd of gas, down from 35 mmcfd during the initial years of production.
Two consecutive gas field blowouts in the Niko-operated Chhatak field, locally known as Tengratila, in January and June 2005, further complicated the dispute.
In India, Niko Resources has acquired working interests in six exploration blocks.
Three of these blocks including KG-D6 are maintaining majority of the company's production.
Indian Reliance Industries Ltd is the operator of KG-D6 with 60 per cent interest, BP Plc holds 30 per cent and Niko has the remaining 10 per cent stake.
azizjst@yahoo.com