The Hindu Business Line : NELP VII: HPCL may tie up with LN Mittal group

New Delhi, Jan. 1 The latest oil and gas blocks licensing round (NELP VII) may see some interesting alliances, including a possible tie-up between State-owned Hindustan Petroleum Corporation Ltd and steel magnate Mr L.N. Mittal’s group company.

HPCL, which is looking at strengthening its portfolio in the exploration business, has plans to enter into strategic alliances and adopt a consortium approach for acquiring acreages in India and abroad.

“All options for NELP VII are under consideration, including a possible tie-up with Mittal,” sources told Business Line. HPCL already has an agreement with the Mittal group for exploring various opportunities down the hydrocarbons chain including exploration and production opportunities. The company also does not rule out a possible tie-up with other foreign and domestic companies that include French company Total, state-owned Oil India Ltd and ONGC.

Oil & gas blocks

At home HPCL, along with its consortium partners, currently has 20 oil and gas blocks and two overseas blocks – one each in Australia and Oman. Its joint venture company Prize Petroleum operates marginal fields in Gujarat and Mumbai High. Prize Petroleum also has onshore blocks in Gujarat and Madhya Pradesh. “With Prize Petroleum having the experience of an operator in the exploration business, there is a possibility that for onshore assets HPCL may go with it,” sources added.

HPCL is looking at building a strong position in developing acreages through investments and tie-ups in production-led exploration, reserve enhancement and focussed acquisitions. India is looking at investments of $3-3.5 billion from the auction of 57 oil and gas exploration blocks from domestic and overseas players. Overseas road shows for the auction are scheduled to start on January 24and bids will close on April 11.

Overseas revenues

Meanwhile, HPCL is also exploring the prospect of setting up refineries overseas. Recently, the Mittals had approached the state-owned company for setting up refineries in Congo and Nigeria. Sources said, “The company is studying the prospect. These are not restricted to setting up refineries alone, but exploring oil and gas opportunities also.”

Mittal Investments Sarl, the holding company of the Mittal family, has picked up 49 per cent stake in HPCL’s Bhatinda refinery in Punjab and signed an agreement to explore setting up an export-oriented refinery at Visakhapatnam.