ONGC-Mittal Combine win Nigerian Oil Blocks!!

Just wanted to make a note of this news byte – the first win by the combination of ONGC (The Indian Oil & Gas GOvernment controlled Giant) and Mittal Companies (of Lakshmi Mittal – the world steel baron).. why? because this is arguably the first example of an NRI backed Government venture for garnering strategic National Interests!!

In its maiden venture in an international bidding round, ONGC Mittal Energy Ltd (OMEL) has won two prospective oil and gas blocks — OPL 209 and OPL 212 — in the Nigeria 2006 mini bid round.

The recoverable reserves potential estimated from a few clearly delineated prospects in the blocks are expected to be over one billion barrels of oil and oil equivalent gas. OMEL expects to pump 650,000 barrels a day from the two blocks, compared to its domestic production of 600,000 barrels currently.

OMEL offered $50 million signature bonus in OPL 212 and matched the highest bid of $65 million signature bonus offered in OPL 209.

The Nigerian government had invited only 10 companies to participate in the bidding for a few oil and gas blocks in April 2006. The Nigeria 2006 Mini Bid round was aimed primarily to award upstream oil and gas blocks to companies that had made commitment to invest in the strategic sectors like refineries, power, transport and railways in Nigeria.

The Mittal-ONGC joint venture was one of the invitee companies, in light of the memorandum of understanding entered between OMEL and government of Nigeria in November 2005, envisaging downstream and strategic investment by OMEL in the African nation.

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