The Hindu Business Line : ONGC, LNM Group to form joint venture for overseas buys

ONGC is set to ink an agreement on Saturday with steel tycoon Mr L.N. Mittal's group (LNM Group) for floating a joint venture consortium for overseas acquisitions.

The MoU is expected to pave the way for formation of project-specific joint venture companies for acquisition of oil companies/fields and energy-related businesses.

ONGC will sign two sets of MoU with the LNM Group.

ONGC Videsh Ltd, its foreign arm, is likely to tie up with LNM Group for acquisition of oil and gas companies/fields abroad.

The second would be between ONGC and the Mittal Group for pursuit of related oil businesses such as refining, petrochemicals, and pipelines.

Speaking to newspersons, the Petroleum Minister, Mr Mani Shankar Aiyar, welcomed the deal saying that the two had a lot of synergy.

ONGC wants to capitalise on the LNM Group's presence in oil and gas-rich countries, especially in the Caspian region, and use its influence in securing lucrative deals.

"We have looked into the draft MoU prepared by ONGC," the Minister said.

On whether the Government has cleared the MoU, he said that he did not anticipate any problem. However, he remained non-committal on the exact contents of the MoU.

According to sources, ONGC will have 51 per cent stake in the joint venture.

The LNM Group has strong presence in Kazakhstan, where ONGC is seeking the Kurmangazy oilfield, sources said.

Both the stakeholders would build on each other's strength. The joint venture consortium is likely to be registered in a EU country. It will concentrate primarily in countries where the LNM group has a presence.

Mittal Steel, the flagship of the LNM Group, has operations in Kazakhstan, South Africa, and Algeria, apart from the US and Europe.

Its presence in countries such as Kazakhstan could help ONGC expand its oil and gas interests in central Asia.

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