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ONGC Mittal (OMEL) JV poised for significant growth
New Delhi December 14, 2006
There are certain press reports covering acquisition of 50%
stake in Lukoil’s subsidiary, Caspian Investment Resources by
Mittal Investment. Relevant to this report, section of the
media has raked speculative apprehensions about continuity of
the Joint Venture between ONGC and Mittal Group in the form of
ONGC Mittal Energy Ltd. (OMEL). To clarify the issues to all
the stake-holders and the interested parties, the following
clarifications are hereby issued jointly by ONGC and Mittal
Investment Sarl.
ONGC Videsh Limited (OVL), the overseas arm of Oil and
Natural Gas Corporation Limited, had entered into an MOU with
Mittal Investment Sarl in July 2005 for synergizing their
respective strengths for carrying hydrocarbon business for
promoting energy security of India. Two companies later
entered into a Joint Venture Agreement in October 2005 and
formed a joint venture company, ONGC Mittal Energy Limited.
The JV Agreement incorporated a list of 10 countries where the
two partners would participate in hydrocarbon business on an
exclusive basis. The JV Agreement also provides a list of
another 17 countries where the two partners would work on
projects identified by mutual consent on an exclusive basis.
Under this scenario, the press reports which suggest that
the ONGC-Mittal joint venture is not running well, are
absolutely baseless. Since its incorporation, OMEL has
successfully been awarded 2 prosperous blocks in Nigeria –
OPL-279 and OPL-285; the production sharing contracts are
expected to be signed shortly. OMEL is also in the process of
being awarded another prosperous exploration block in Nigeria.
OVL’s subsidiary, ONGC Nile Ganga B.V. had acquired interest
in a producing property in Syria along with China National
Petroleum Corporation, a part of which is held by OMEL.
OMEL is also in an advanced stage of signing a farm-out
agreement in respect of an exploration block in Turkmenistan.
OMEL has also recently bid for an offshore block in Trinidad &
Tobago. In addition, OMEL is looking for various opportunities
including in Kazakhstan, Turkmenistan, Azerbaijan, Indonesia,
which are at different stages of progression.
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