New Delhi: Billionaire Lakshmi N. Mittal’s joint venture with state-owned Oil and Natural Gas Corp., ONGC-Mittal Energy Ltd (Omel), has won preferential rights to bid for a Nigerian exploration block after promising to invest $2 billion (Rs8,400 crore) in the country’s infrastructure.
Omel has been given the right of first refusal (RoFR) on Block 250 in return for a pledge to carry out a feasibility study into a new railroad, industry sources said.
Ten foreign and local companies were given preferential rights for 20 blocks under Nigeria’s RoFR system in the latest bidding. Under this, bidding companies pledge to invest in infrastructure in exchange for exploration blocks.
Sources said Nigeria has given China National Petroleum Corp. (CNPC) RoFR for at least one block, and possibly four in total, in exchange for a pledge to become a major investor in the Kaduna railway project.
China’s CNOOC Ltd has RoFR on up to seven blocks in return for a $2.5 billion loan from the Export-Import Bank of China for a railroad project in western Nigeria.
Nigeria is auctioning a total of 45 exploration blocks—11 in deep-water offshore, 10 in shallow water, 13 onshore in the Niger Delta and 11 in inland basins.
In the May 2006 auction, Omel agreed to spend $6 billion on building a 180,000- barrels-per-day refinery, a 2,000MW power plant, and a railway running East-West across Nigeria in lieu for right of first refusal for three blocks.