The Hindu Business Line : ONGC may rope in Shell, Total as partners in Nigerian blocks

ONGC is in talks with Royal Dutch Shell Plc and French oil major Total S.A. to take them on board as equity partners in the Nigerian blocks, OPL 212 and 209. "We are in talks with Shell and Total. We may give a 10-15 per cent stake," the ONGC Chairman, Mr R.S. Sharma, told newspersons on the sidelines of an industry event on Wednesday.

The two blocks are owned by ONGC Mittal Energy Ltd (OMEL), a joint venture between ONGC and L.N. Mittal Group. Asked which joint venture partner will be diluting its stake in the blocks to Shell or Total, an ONGC official said, "it is too early."

Both Shell and Total have large expertise in that region. One of the blocks, which OMEL will now operate on lease, is close to Bongo fields of Shell. This is a discovered field with reserves of one billion barrels. The other OPL 209 is close to the one operated by Exxon and Shell, having reserves of 800 million barrels, he said.

Besides, OMEL is in an advanced stage of signing a farm-out agreement in respect of an exploration block in Turkmenistan. OMEL has also recently bid for an offshore block in Trinidad & Tobago. In addition, OMEL is also looking for opportunities in Kazakhstan, Turkmenistan, Azerbaijan, and Indonesia.

Brushing aside any apprehensions that the joint venture was not running well, ONGC said the joint venture agreement incorporated a list of 10 countries where the two partners would participate in hydrocarbon business on an exclusive basis. It also provides a list of another 17 countries where the two partners would work on projects identified by mutual consent on exclusive basis.

In a statement issued by Lukoil on Tuesday, it said Lukoil Overseas and Mittal Investments have signed an agreement for Mittal to buy a 50 per cent interest in Caspian Investments Resources Ltd. Through Caspian Investments Resources Ltd Lukoil last year acquired Nelson Resources Ltd, which has a 50 per cent stake in projects to develop four fields in Kazakhstan.

The total cost of the deal between Lukoil Overseas and Mittal Investments is $980 million. Besides that, Mittal Investments will assume the responsibility for the 50 per cent of Caspian's outstanding debt (50 per cent of which is currently approximately $160 million), the statement said.

Caspian Investments Resources Ltd was a 100 per cent-owned subsidiary of Lukoil Overseas. After the completion of the deal, which is expected in early 2007, Caspian Investments Resources Ltd will become a joint venture of Lukoil Overseas and Mittal Investments, the statement said

According to sources, ``Mittal Investments will buy 50 per cent stake in the Russian company's wholly owned subsidiary in Kazakhstan, Caspian Investments Resources. If approved by local authorities and Lukoil, the acquisition will go to OMEL at a later stage.''

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