The Hindu Business Line : Ventures with Mittal on, says ONGC

Fact file
OMEL has signed a pact with Nigeria for lifting rights for 32.5 million tonnes of crude oil per year, equal to India's current annual production.

Kolkata , Aug 22

ONGC on Tuesday refuted allegations that lack of interest on the part of the oil major was affecting the future of ONGC Mittal Energy Services Ltd (OMESL). The 51:49 joint venture was formed as per an MoU between ONGC and Mittal in July 2005 to undertake trading and shipping of oil and gas including LNG.

"As far as we are concerned both the joint ventures are on", an official said referring to both OMESL and ONGC Mittal Energy Ltd (OMEL). The latter was formed to acquire oil and gas equities abroad.

OMEL has recently signed a pact with Nigeria for lifting rights for 32.5 million tonnes of crude oil per year, equal to India's current annual production.

According to the official, OMESL has recently communicated to the Union Petroleum Ministry for getting registered with Indian refiners for evacuation of crude oil and other petroleum products. Such registration would require counter-guarantee on the part of ONGC.

"We are going to seek board approval for providing such guarantees to OMESL next month", he said.

Though he made it clear that OMESL's line of business is not part of the core activity of ONGC, the official said that there had not been any reversal of decision in regard to thejoint venture.

"Trading and shipping is non-exclusive business to ONGC and some discussions are on between both the parties (ONGC and Mittal)," he said.

Slowdown

Meanwhile the fate of Mangalam Retail Services Ltd, a joint venture between MRPL and Ashok Leyland Project Services (ALPS), also appeared to be sealed for the time being. The joint venture was slated to offer automobile and allied motor fuelling services including travel-related facilities and services through a minimum of 25 outlets in the initial phases.

Stating that a "slow-down" in the proposed business activity of the joint venture was imminent, the official said, "Considering the state of fuel retailing business whereby none other than the four OMCs are compensated for the loss in retailing, MRPL has decided to go slow on retailing. Naturally the joint venture would also be subjected to a slow down".

He, however, reiterated that the retailing project is not dropped. "It is merely a slow-down for the time being".