London: Steel magnate Lakshmi Mittal plans to bid for oil and gas assets being auctioned by the Indian government as the billionaire tycoon looks to step up his family’s diversification away from the steel sector.
Mittal, chief executive of the world’s leading global steelmaker, ArcelorMittal said his group intended “to participate in NELP 7,” an acronym for the seventh round of India’s New Exploration and Licensing Policy.
India is hoping to draw up to $3.5 billion (Rs13,791 crore)from the auction of 57 oil and gas exploration blocks from domestic private and overseas groups. Overseas roadshows for the auction are scheduled to start on 25 January and bids will close on 11 April.
Mittal declined to reveal details of how many blocks his group would bid for, but said the move to participate in the auction was part of his family’s slow diversification away from the steel business.
“We are slowly trying to grow this sector for us as a family. Not as ArcelorMittal,” Mittal said.
“It is part of the family’s diversification from steel. As a family we want to diversify into other sectors. Combine that with our knowledge and experience in steel, perhaps oil could be another sector for us,” he added.
The group has expertise in the commodities and resource sector, and has over the years gained experience in dealing with governments around the world, which industry experts say can be leveraged in the energy sector.
The London-based businessman said the family was looking at opportunities ranging from exploration and production to refining. Asked if petroleum retailing was an area he would consider, Mittal said: “Today, we do not have retail in mind.”
A lot of Mittal’s plans are currently centred in India, where his Singapore-based family investment arm Mittal Energy Investments has picked up a 49% stake in a refinery planned in Punjab.
Hindustan Petroleum Corp Ltd (HPCL) is Mittal’s partner in the venture. Mittal is eyeing a stake in another refinery being planned by HPCL in Andhra Pradesh, sources close to the deal had said earlier.
Another of his investment companies, Mittal Investments Sarl, has teamed up with Oil and Natural Gas Corp (ONGC) to form ONGC Mittal Energy Ltd to buy energy assets outside India.
The Mittal family has slowly but steadily been increasing its presence in the energy sector across the globe, with interests in oil and gas in Turkmenistan, Kazakhstan, Syria, Russia and Nigeria.
He has also pledged $1.1 billion for oil, power and liquefied natural gas projects in Bangladesh. Mittal’s growing presence in the energy business has prompted speculation that his group had considered a bid for Britain’s Burren Energy, which last month agreed to a 1.74-billion-pound bid by Italy’s Eni.
Asked about Burren, which has assets in the Democratic Republic of Congo and Turkmenistan, Mittal noted its deal with Eni was “a done deal” and refused to say whether he could launch a counterbid. “I do not comment on such things,” he said.