Business
Mittal to pay $980 mn for stake in Kazakh oil firm http://www.ndtvprofit.com/homepage/storybusinessnew.asp?template=&whichstory=n&id=35256
Wednesday, December 13, 2006 (New Delhi):
Lakshmi Mittal will pay Russia's Lukoil $980-million to buy 50 per cent stake in a Kazakhstan oil firm and may later transfer it to ONGC-Mittal Energy Ltd, his venture with state-run ONGC.
Separately, OMEL plans to give Total of France and Royal/Dutch Shell a stake in its two Nigerian deep-sea blocks.
"Mittal Investment 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," an industry official said.
Late last year, Caspian Investments Resources served as the vehicle for Lukoil's purchase of Nelson Resources, a Canadian firm with assets in Kazakhstan.
The deal with Mittal Investments, planned for completion in early 2007, also covers debt of $160-million held by the venture. Caspian Investments Resources has reserves totaling 270 million barrels of crude.
The official said OMEL will give Total of France 18 per cent stake in Block 279 and 26 per cent Block 285 in Nigeria, the only country where the joint venture between the world's largest steel producer and state-run Oil and Natural Gas Corp (ONGC) has been successful till date.
New partner
Shell will also be roped in as a partner in the block with 10-15 per cent stake, he said. OMEL had agreed to pay $50 million to Nigerian government for Block 285 and $65-million for Block 279. Total and Shell will have to bear this payment in proportion to their shareholding.
As part of deal with Total, OMEL will have the right to take a stake in the French company's Block 215.
ONGC Chairman and Managing Director R S Sharma confirmed the talks with Total and Shell for the Nigerian oil blocks but refused to divulge details.
Industry officials said Total may also be taken as partner in the highly prospective Block 246 that OMEL won in October.
OMEL had bid $100 million for Block 246, which is the relinquished area of the billion-barrel Akpo oilfield of Sapetro.
A senior ONGC official said Total and Shell are being roped in as partner in the Nigerian blocks as the two have considerable experience in deep water exploration in the African nation.
Block 279 lies near ExxonMobil's Erha project while Statoil of Norway had struck hydrocarbons in Block 285 previously.
The Akpo field, about 200 km off the Nigerian coast, is operated by French energy giant Total. Block 246 was carved out of the larger block that held Akpo field. The French company has considerable knowledge on the block's prospects.
Akpo field is expected to produce 225,000 barrels of oil a day when it comes on stream in the second half of 2008. (PTI)