ONGC Mittal Energy under scrutiny in Nigeria

ONGC Mittal Energy under scrutiny in Nigeria

New Delhi: Oil and Natural Gas Corporation and steel billionaire Lakshmi N. Mittal combine’s oil block in Nigeria has come under the scrutiny of African nation’s Parliament for alleged irregularities in its allotment.

ONGC Mittal Energy Ltd, the joint venture company floated by ONGC and Mittal Investment Sarl, had in November 2006 paid $100 million to win OPL-246 block. Nigerian Government had vested the block from local company South Atlantic Petroleum (Sapetro) before allocating to OMEL.

An ad-hoc committee of the House of Representatives has been formed to investigate into the alleged irregularities in allotment of oil blocks between 2006 and 2008, a Nigerian government official said from Abuja.

“The allotment committee has already examined OMEL representative D. Halder. The committee found discrepancy in technical report prepared by Department of Petroleum Resources and applications for OPL 216 and 246 could not be traced in the files. It also reported to have discovered that OPL 246 was awarded to OMEL after the bid round for 2006 had been closed. The Committee noted from the records that OPL 246 was awarded to an oil company (Sapetro) before DPR gave it out to OMEL," the official said.

The committee has also sought to know how far OMEL had gone in fulfilling the investment it had committed in downstream projects to secure oil blocks in Nigeria.

“They have not moved an inch on those projects," the official said.

He said DPR Director Tony Chukwueke, who handled the 2006 bid round, has already been suspended.

OPL 246 is the relinquished area of the billion-barrel Akpo oilfield of South Atlantic Petroleum (Sapetro) which is part-owned by Theophilus Danjuma, former defense minister.

In January 2006, ONGC had lost out on acquiring Sapetros 45% stake in Akpo to China’s CNOOC after the Indian government disallowed the state-owned firm from proceeding on the transaction where it was the highest bidder.

The Cabinet barred ONGC from proceeding on the bid as it felt placing a huge sum of money in hands to Danjuma was a risky proposition.

OMEL had in 2005 won rights to explore in OPL-279 and OPL-285 after committint and a railway line from east to the West of Nigeria.

It paid a signature bonus of $50 million for OPL-285 and USD 75 million for OPL-279. These blocks are not being scrutinized as of now, the official said.