Corporate czar Lakshmi N Mittal is planning to exit some of the lucrative oil properties his group purchased in Kazakhstan.
The holding company of the Mittal’s — Investments Sarl (MIS) — is already in negotiations with Oil and Natural Gas Corporation (ONGC), which is a partner, to sell its stake in these properties.
A confidential note prepared for the April 17 meeting of the Empowered Committee of Secretaries (ECS) said ONGC may now have to invest the entire $400 million as against its earlier share of $204 million in the Satpayev exploration block in Kazakhstan under an arrangement with Mittal.
The government of Kazakhstan had recently allotted a 25 per cent stake in Satpayev block to ONGC Mittal Energy Ltd (OMEL) — the joint venture company of ONGC and MIS — for $400 million. ONGC was to invest $204 million while the balance was to be brought in by MIS.
According to the ECS note, “In the event MIS does not participate in the project, OVL will take the project in its own or its wholly owned affiliate’s name in which case its investment will be $400 million for 100 per cent share.”
The ECS note also cited a recent approval to ONGC by its board for a 90-day extension to carry out due diligence with a view to acquiring 50 per cent of Mittal’s holding in the Caspian Investment Resources Ltd (CIRL), which has equity in five Kazakh oil fields.
A spokesperson for Mittal Investments said, “Talks are on with ONGC for CIRL. Am not sure about Satpayev.”
CIRL was acquired by Mittal’s in April 2007 from the Russian firm Lukoil for $980 million.
The note said MIS had in January this year offered to divest 50 per cent of its holding in CIRL to OVL. “Should OVL approve its participation in CIRL, MIS will continue to participate in Satpavev block also,” the note said.