The Hindu Business Line : OMEL may get rights to lift Nigerian crude

THE Government of Nigeria has expressed its willingness to offer to ONGC Mittal Energy Ltd (OMEL) the rights to lift 1,20,000 bbl/day (barrels per day) of Nigerian crude oil on commercial basis.

According to a statement issued here by OMEL, this includes 40,000 bbl/day of crude now being lifted by Indian refineries. The Nigerian Government has also offered an assurance of substantial liquefied natural gas (LNG) offtake out of the Government's share of gas, the statement said. OMEL has entered into a memorandum of understanding with the Ministry of Petroleum Resources, Nigeria, on November 10. The MoU envisages several projects to address the imperatives of the Government of Nigeria as well as to meet India's surging energy requirements in a mutually beneficial manner, the statement said.

OMEL is a joint venture between ONGC Videsh Ltd (OVL), a wholly-owned subsidiary of ONGC and Mittal Investment Sarl, the controlling shareholder of Mittal Steel Company. OMEL, incorporated in the Republic of Cyprus, is focused on overseas oil and gas business.

Speaking on the MoU, Mr Subir Raha, ONGC Chairman, said that the essence of the understanding was production of an average 650,000 barrels/day Oil+Oil equivalent Gas (O+OEG) per day (equivalent to 32.5 million tonnes per year) over 25 years by OMEL from the deepwater exploration blocks to be allocated by the Nigerian Government.

Mr Raha added that depending on the geo-scientific parameters of the deepwater exploration blocks to be selected, it should be possible to commence the deliveries under the 650,000 barrels/day transaction in 5 to 7 years.

Further, OMEL has proposed to build an export-oriented refinery of 180,000 barrels/day capacity based on Nigerian crude, subject to technical and financial viability. OMEL has also offered to invest $6 billion in Nigeria on 2,000 MW coal and/or gas-based power plants, railway systems and capacity building, the company statement said.

OMEL would also facilitate upgradation of the Petroleum Training Institute, Effurun, Delta State. These investments by OMEL would be calibrated to the average sourcing of oil and gas from the two good quality deepwater exploration blocks to be selected and operated by OMEL on the basis of production sharing contracts, the company said.

The MoU also proposes that joint working groups would be constituted to develop definitive agreements and corresponding action plans for each of the component projects. ONGC Mittal Energy Services Ltd (OMESL) would be developing the required trading, shipping and terminalling facilities, the statement said.

OMESL is a joint venture of ONGC and Mittal Investment Sarl, focussed on shipping and trading of hydrocarbons.

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OMEL may get rights to lift Nigerian crude