The Hindu Business Line : Kazakh asset: Contractual hiccups holding up transfer to OMEL

Kazakhstan is one of the 10 countries the Mittal Group had identified for exclusive pursuit of oil and gas opportunities in joint venture with ONGC.

Richa Mishra

New Delhi, Dec. 11 ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, may have to wait for sometime before it is able to get its first oil and gas asset in Kazakhstan.

Some contractual hiccups need to be sorted out before the Kazakhstan oil asset acquired by the steel baron L.N. Mittal’s group company is transferred to the Mittal-OVL joint venture, ONGC Mittal Energy Ltd (OMEL), official sources said.

The joint venture partners are trying to find a structure so that the transfer of the asset can take place without infringing the laws of that country or the contract, sources told Business Line. The Mittal Group had acquired the Russian firm Lukoil’s 50 per cent stake in Caspian Investments Resources for $980 million in April.

This acquisition was initially proposed through the joint venture company – OMEL. However, the asset was acquired by Mittal alone from Lukoil in April this year. As per reports, the Mittal group had acquired the assets on its own as there was some opposition by the Kazakhstan Government on OMEL acquiring the stake. Mittal Investments and Lukoil now hold 50 per cent each in Caspian Investments Resources Ltd.

Lukoil had used Caspian Investments to buy Kazakh oil producer Nelson Resources Ltd for $2 billion in 2005. In July , Mr L.N. Mittal had said that plans were in progress to transfer the Kazakhstan oil asset to OMEL.

Kazakhstan is one of the 10 countries the Mittal Group had identified for exclusive pursuit of oil and gas opportunities in joint venture with ONGC.

In July 2005, Mittal Group and ONGC had agreed to participate on an exclusive basis through the joint venture company in Angola, Azerbaijan, Congo Brazzaville, Democratic Republic of Congo, Indonesia, Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan and Uzbekistan for acquiring oil and gas assets. OMEL has acquired two oil blocks in Nigeria, one gas block in Trinidad and Tobago, an oilfield in Syria and a gas block in Turkmenistan.

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Mittal may transfer Kazakh stake to OMEL

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