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No objection to Mittal-HPCL pact, says ONGC

No objection to Mittal-HPCL pact, says ONGC
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First Published: Mon, Mar 26 2007. 08 51 PM IST
Updated: Mon, Mar 26 2007. 08 51 PM IST
By livemint team with PTI
New Delhi: Oil and Natural Gas Corp said on 26 March it had no objection to Lakshmi N. Mittal picking a stake in HPCL’s Bhatinda refinery, following reports in a section of the media that the joint venture with Hindustan Petroleum violates the Mittal Group’s JV with ONGC.
ONGC said in a press release that its agreement with Mittal for pursuing oil and gas opportunities jointly had “no clause which makes it binding or obligatory for Mittals to conduct business in India on exclusive basis with ONGC.”
It added, “However, in one of the promoters’ meetings, the subject project was brought to ONGC’s notice and since ONGC did not evince interest, Mittals have gone ahead with their intent to invest in the joint venture refinery project with HPCL.”
The release, however, did not dwell on the steel tycoon’s investments in Kazakhstan and Nigeria on its own, both of which were mentioned in the media reports. The PSU oil major steered clear of mentioning that Mittal had gone alone in acquiring an equal interest in a Kazakhstan oil firm from Russia’s Lukoil for $980 million.
It was also silent on his buying 3% in the $6 billion Chevron-operated Olokola LNG (OK-LNG) project in Nigeria, and not through his joint venture with the state-run firm, ONGC Mittal Energy Ltd.
“ONGC wishes to place on record that no such objection (to Mittal taking 49% stake in Bhatinda refinery for Rs3,300 crore) has been expressed by ONGC management,” the release said.
The release was, however, silent on why Mittal had gone alone in picking stake in OK-LNG even though the agreement with the Nigerian government, signed in presence of the then Additional Secretary in oil ministry Talmiz Ahmad, had clearly marked the stake for OMEL.
The ONGC release said the company ”enjoys very cordial and harmonious relations with Mittals and the promoters have been meeting from time to time to review the progress of their joint venture business.“
But it did not say why the Board of OMEL and ONGC-Mittal Energy Services Ltd, the joint venture for trading in energy, has not met even once since incorporation in January 2006.
“The latest promoters meeting was held in London on March 22, attended by Mittal and ONGC acting chairman R S Sharma and again in Delhi on March 24, attended by Mittal and Sudhir Maheshwari from Mittals and ONGC Videsh Ltd managing director R S Butola.
“In both the meetings, the promoters expressed absolute satisfaction at the progress made so far and deliberated on the futuristic business plan to expand the joint venture activities,” the release said.
According to officials, Clause 2.4 of the 2005 agreement reads: “In the event Mittal or its affiliates is desirous of undertaking any venture or business opportunity in hydrocarbons business in areas other than the Territories (27 countries), Mittal shall invite OVL to the extent permissible and in the manner and with such information about such venture or business opportunity as it deems fit, to participate in such venture or business opportunity together with Mittal.”
The agreement had classified target countries into Schedule-I and II.
Mittal and ONGC had agreed to participate on an exclusive basis through OMEL in the Schedule-I countries of Angola, Azerbaijan, Congo Brazzaville, Democratic Republic of Congo, Indonesia, Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan and Uzbekistan, the official said.
In the Schedule-II countries of Bosnia, Canada, China, Czech Republic, France, Germany, Kyrgyzstan, Liberia, Macedonia, Mexico, Nigeria, Poland, Sao Tome and Principe, South Africa, Sudan, United Kingdom and the US, the two agreed to bid jointly on a case-to-case basis, officials said.
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First Published: Mon, Mar 26 2007. 08 51 PM IST
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