On 9 November, Canada-based Niko Resources Ltd, a 10% partner in Reliance Industries Ltd’s (RIL) and BP Plc’s D6 block in the Krishna-Godavari (KG) basin, announced it would sell its stake.

Five days prior to that, on 4 November, Niko, and its partners had been slapped with a $1.55 billion fine for drawing gas from Oil and Natural Gas Corp. Ltd’s deep-water block in the KG basin for seven years. The partners have rejected the claim and decided to fight it legally.

With the sale of its stake in D6, Niko’s presence in India will diminish further. Last November, owing to a cash crunch, Niko relinquished its 10% stake in another block, NEC-25, which lies off the Odisha coast, to its existing partners RIL (60%) and BP (30%).

The Hazira field where it holds 33.3% stake has been put on the block by its partner Gujarat State Petroleum Corp. Ltd (which holds 66.7% stake).

The $1.55-billion fine would have further increased the stress on Niko’s finances.

Does this mean the end of the road for Niko in India? The company did not reply to an email sent on Monday, but while announcing its earnings for the second quarter on 9 November, Niko admitted that it was in trouble. “As a result of the foregoing matters (including the ongoing obligations of the company and its subsidiaries), there is material uncertainty that may cast significant doubt about the ability of the company to continue as a going concern,” it said.

Niko, one of the few international oilfield operators in India, entered the country in the early 1990s. When its partner RIL found gas in the KG-D6 block in 2002, touted as the world’s biggest gas find that year and India’s largest in 30 years, the Canadian firm seemed to have hit pay dirt. Over seven years, RIL and its partners invested $9 billion in the block.

KG-D6 was considered Niko’s most promising asset.

The KG-D6 fields hit a peak production of 69.43 million standard cubic metres per day (mscmd) of gas in March 2010. In 2010, Niko’s share price hit a high of 102.081 Canadian dollars (CAD) on the Toronto Stock Exchange, helping its market capitalization rise from CAD 4,888.601 million to CAD 5,271.59 million.Since then, the share prices have fallen, and how.

In the past one year, shares of Niko Resources have fallen 10% from CAD 0.10 per share to CAD 0.09 per share. Market capitalization has fallen to CAD 8.46 million.

RIL and its partners had estimated a 10 trillion cubic feet (tcf) of gas in the block, but due to the reservoir’s complexity and sand and water ingress, production declined. RIL, the operator of KG-D6, had at one point projected gas output at 80 mscmd. Currently, the block is producing 8.7 mscmd.

“It is not easy to do business in India. To work here is a constant struggle with the government. We have been hearing talks of improving the ease of doing business but the ground situation is completely hostile,” said an official from one of the partner companies in the D6 block. He spoke on condition of anonymity as he is not allowed to talk to the media.

To be sure, apart from the ONGC issue, RIL and its partners have also been accused by the government’s auditor of gold-plating the costs of exploring and producing gas from their blocks in the KG basin. In the past two years, RIL and its partners have further invested Rs4,500 crore to sustain production.

“Niko, like other players, was bullish on India and was betting on the revised gas price. But with the new gas price regime in place, its expectations came crashing down,” said the CEO of an exploration and production company on the condition of anonymity.

His company is bidding for the Hazira field in Gujarat where Niko is a partner.

The government had in October 2014 fixed a domestic gas pricing formula based on rates prevalent in gas-dominant economies such as the US, Mexico, Canada and Russia.

The notified price for gas sales from the D6 block for October 2016 to March 2017 is $2.50 per million British thermal unit (mBtu) gross calorific value—a decrease of 18% from the notified price for April 2016 to September 2016 and a decrease of about 34% from the price prior to the adoption of the New Domestic Natural Gas Pricing Guidelines, effective 1 November 2014.

“Net oil and natural gas revenues decreased for the second quarter of fiscal 2017 compared to the second quarter of 2016 primarily due to lower natural gas sales volumes and prices,” Niko said in its second-quarter earnings statement, adding that “the decrease in the notified price for gas sales from the D6 block is projected to have a negative impact on net cash flow of approximately $1.5 million for each of the next two quarters”.

Still, it may not be easy for Niko to sell its stake.

“While we believe the D6 block offers a number of compelling attributes to potential bidders, the sales process will inevitably be complicated by the recent claim made by the Government of India against the contractor group of the D6 production sharing contract in respect of gas said to have migrated from neighbouring blocks to the D6 block,” said Robert S. Ellsworth Jr, Niko’s interim chief executive officer, in the second-quarter earnings report, referring to the issue with ONGC.

Ellsworth added that Niko believes the contractor group is not liable for the amount claimed and is working to defend against the claim by invoking the dispute resolution mechanism in the D6 block production-sharing contract.