The Hindu Business Line : ONGC Mittal Energy signs MoU with Nigeria

ONGC Mittal Energy Ltd (OMEL), the joint venture between Oil and Natural Gas Corporation and L. N. Mittal Group, has signed a memorandum of understanding with the Nigerian Government for long-term infrastructure investments in exchange for drilling rights in that country.

Mr Subir Raha, Chairman, ONGC, told Business Line "We have signed an agreement with the Nigerian Government on Thursday.''

He, however, declined to give the financial details. OMEL would invest in railways, oil refining and power in Nigeria in exchange for oil drilling rights. Indications are that OMEL has been offered two blocks by the Nigerian Government.

Under the agreement, the investment was expected to be proportional to the scale of oil discoveries.

In fact, Nigeria has been scouting for foreign investment in infrastructure to pull its economy out of decades of stagnation.

According to reports coming in from Nigeria, the oil exploration blocks could be chosen from those that failed to receive bids in a recently-concluded licensing round. The power project in Nigeria would be a coal-fired independent power producer while the railway is meant to travel from the southern oil city of Port Harcourt to Kano 1,000 km (625 miles) to the north.

At a recent meeting with a high-level Nigerian delegation in India, OMEL and ONGC Videsh Ltd (OVL) had sought specific exploration and production (E&P) blocks in that country. A proposal was made to consider OVL and OMEL for some reserved blocks in that country.

The Nigerian Government, normally, keeps these blocks for certain players. Nigeria was looking for integrated infrastructure projects, including investments in export-oriented refineries, liquefied natural gas projects and railways.

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