The L N Mittal group is likely to pull out of the oil and gas exploration projects that are being developed jointly with the Oil and Natural Gas Corporation Ltd in Trinidad and Tobago in the West Indies and in Kazakhstan, because of the global meltdown and sharp drop in oil prices, media reports said.

The Mittal group, which owns world' largest steel company ArcelorMittal, and India's state-owned oil and gas major ONGC were jointly developing the two projects, NCMA-2 block in Trinidad and Tobago and Satpayev block in Kazakhstan, under their joint venture ONGC Mittal Energy Ltd.

Mittal Investments, confirming the exit from at least one of the blocks, reportedly said the group has carried out a thorough analysis of the Trinidad project, considering the impact on the oil and gas industry due to the current economic situation. Therefore, the group has decided not to go ahead at this point in time.

However, ONGC is keen to retain Mittal in these projects. Its chairman and managing director R S Sharma said it had been told by the Mittal group of its intention, but ONGC is hopeful of rescuing the project. He added that ONGC and the Mittal group were working out some solutions. The Mittals too said the promoters (OMEL) have not yet made a final decision.

OMEL holds a 65-per cent interest in NCMA-2, an offshore exploration block located at the northern margin of Trinidad and Tobago, while Trinidad and Tobago's national oil company Petrotrin holds the balance rest. In 2007, OMEL bagged the block which has estimated reserves of two trillion cubic feet of natural gas.

The company said low return on investments due to a slump in global oil prices was the main reason for considering a pull-out and not financial constraints, adding that projections on returns have changed as oil prices have halved.

The other joint project, the Satpayev block in the pre-Caspian basin of Kazakhstan in Caspian Sea, is situated in a highly prospective region near major fields like Karazhanbas, Karakas, Lasagna and Donga, where major oil discoveries have been made. However, it is short of funds, as both ONGC and Mittal have said.

While ONGC was instrumental in getting the Satpayev block, Mittal was the main force behind Trinidad deal. The two partners are also carrying out exploration and production ventures in Nigeria and Turkmenistan under the OMEL banner.

ONGC and the Mittals' investment arm, Mittal Investment SARL, formed OMEL in 2005. ONGC holds about 49.98 per cent in the JV and Mittal Investment holds 48.02 per cent, with the balance held by SBI Caps.