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Journalism of Courage
Steel czar Lakshmi N Mittal has offered to sell half of his stake in a Kazakhstan oil field to state-run ONGC Videsh in line with its previous commitment,a statement from his holding company said on Wednesday.
“Mittal has offered to transfer half of its stake (in Caspian Investments Resources) to OVL in line with its previous commitment to OVL,” Mittal Investment Managing Director Sarl Sudhir Maheshwari said in an e-mail statement.
Mittal Investment Sarl,the holding company of Mittal family’s interest in world’s largest steel firm ArcelorMittal,had in April 2007 acquired 25 per cent stake in Caspian Investments Resources from Russian oil firm Lukoil for USD 980 million.
Maheshwari said “Mittal Family is comfortable with its stake in the Kazakh Caspian project” and the transfer had nothing to do with financial constraints or funding requirement for the Satpayev field which it along with OVL had been allocated in January this year.
He,however,said the stake transfer to OVL in Caspian was “subject to the pre-emption rights of the partner (Kazakhstan national oil firm KazMunaiGaz) or the Government of Kazakhstan.”
Kazakhstan law stipulates KazMunaiGaz taking half of ownership of an oil property at every equity stake transfer.
Sources said Mittal has opened dialogue with OVL for selling stake in CIR but it was not immediately clear if the overseas arm of Oil and Natural Gas Corporation (ONGC) will have to pay half of USD 980 million or a little premium over that.
Caspian Investments Resources (CIR) acquisition was originally to be done by ONGC Mittal Energy Ltd (OMEL),the equal joint venture of OVL and Mittal Investment,but the India-born billionaire went ahead on his own citing opposition to OMEL from Lukoil.
Mittal is keen on selling half of his stake in CIR or 12.5 per cent to OVL.
CIR has equity in five Kazakh oil fields Alibekmola,Kozhasai,Northern Buzachi,Karakuduk and Arman in the Aktyubinsk and Mangistau regions. The current production from the fields,which have total proven reserves of some 270 million barrels,is more than 40,000 barrels per day and is set to increase in the coming years.
Kazakhstan had earlier this year agreed to give OMEL 25 per cent in Satpayev block that can produce 2,87,000 barrels of oil per day from the 256 million tons of recoverable reserves.
Sources said for Satpayev,OMEL will pay USD 13 million as signature bonus and has committed USD 307 million in exploration expenditure.
