State-owned Oil and Natural Gas Corporation (ONGC) said on Thursday that its energy trading joint venture with steel czar Lakhsmi N. Mittal would now be merged with the other exploration joint venture company of ONGC and Mittal.
ONGC had in 2005 formed two joint ventures with Mittal — ONGC Mittal Energy Ltd (OMEL) for acquisition of oil properties and ONGC Mittal Energy Services Ltd (OMESL) for trading and shipping of oil and gas, including liquefied natural gas.
Without going into the reasoning, a ONGC statement said, “The co-promoters have since mutually decided to collapse OMESL into OMEL, with a view that any trading and shipping activity in the future can be undertaken through OMEL itself.”
ONGC said OMESL was to trade and ship oil and gas, primarily those produced from properties owned by OMEL. “While OMEL is currently having a producing oil asset in Syria and exploratory blocks in Nigeria, OMESL has been a dormant firm as the co-promoters mutually consented not to pursue purely trading and shipping activities,” ONGC said.
ONGC, however, did not clarify as to why it had not contributed its share of $5 million towards equity of OMESL and the company had survived till now only on Mittal’s equity share. Mittal had in August 2006 written to the Government against ONGC's attempts to derail the venture. ONGC’s statement was silent on this front.