The Hindu Business Line : ONGC-Mittal combine bids for PetroKazakhstan

THE state-owned Oil and Natural Gas Corporation Ltd (ONGC) has in partnership with the L.N. Mittal Group (LNM) submitted a bid to acquire the Canada-based PetroKazakhstan Inc.

The bid has, however, not been submitted through ONGC Mittal Energy Ltd (OMEL), a company floated by ONGC and Mittal Group for overseas oil and gas acquisitions.

A senior ONGC official told Business Line that a joint bid has been submitted after due legal consideration. Sources said that the bid could not be submitted via ONGC Mittal Energy as the company is yet to be incorporated.

The official said bid for PetroKazakhstan was between $3.4 billion and $3.6 billion.

In OMEL, 98 per cent equity will be held in proportion of 51 per cent with OVL and 49 per cent with Mittal Investment, and the remaining two per cent equity will be held by financial institutions.

Initially, both ONGC and Mittal will put an equity participation of $50 million each in the joint venture, sources said. The two groups will co-operate in exploration, development, production, evacuation and related consequential processing of hydrocarbons in the form of oil, condensates or gas (including LNG) in various countries.

In fact, sources had indicated during the signing of the MoU that Canada-based PetroKazakhstan and Nigeria might be their first targets.

The joint venture company is likely to be set up in an EU country, most probably Cyprus. The joint venture company would target oil and gas opportunities in Central Asian countries and Africa.

The second MoU was signed between ONGC and Mittal Investments Sarl for setting up ONGC Mittal Energy Services Ltd (OMESL), with a similar shareholding pattern for co-operation in trading and shipping of oil and gas (including liquefied natural gas), sourced through ONGC-Mittal Energy Ltd. In other words, in both the ventures, ONGC will hold 49.98 per cent stake, while LNM will have 48.02 per cent equity. The remaining two per cent will be with ICICI.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page