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ONGC-Mittal wins block in Trinidad and Tobago

NEW DELHI: Indian born steel baron, L. N. Mittal’s joint venture with Oil and Natural Gas Corporation Videsh Limited (OVL) beat Britain’s Centrica plc to bag an exploration block with estimated gas reserves of two trillion cubic feet (tcf) in Trinidad and Tobago.

Mittal Energy and OVL joint venture, ONGC-Mittal Energy Ltd. (OMEL), made a revised financial commitment of about $204 million to win the block. Trinidad and Tobago had in January 2006 offered eight onshore and three shallow marine blocks for bidding. OMEL made an initial bid of about $175 million, including signature bonus.

It later emerged that Centrica and a consortium led by BG of Britain had also submitted bids for the block.

OMEL said that there was a tie in the bids of OMEL and Centrica and OMEL was asked to submit a revised bid. The bid parameters were reviewed by OVL and OMEL in consultation with technical advisors and a revised bid for the block with an increase in the minimum financial exposure to OMEL from about $175 million to about $204 million was submitted. The Trinidad and Tobago Government has said that OMEL’s revised bid had been successful and it had invited the company to negotiate the production sharing contract (PSC) for the block.

Official sources said that though it was earlier decided that a part of the equity would be shared with other Indian companies, considering the level of investment and risk involved, OMEL decided not to farm-out any equity at this stage and it would hold 100 per cent participating interest in the block.

This is OMEL’s second biggest success after Nigeria where it had acquired two exploration blocks. Mittal had in July 2005 inked a joint venture agreement with ONGC Videsh for acquiring oil and gas fields, refinery business and LNG projects in 27 countries. OMEL was looking for various opportunities in Kazakhstan, Turkmenistan, Azerbaijan, Indonesia, which were at different stages of progress, the official said.

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