Mittal Steel floats joint venture with Total, Lukoil
12 December 2006
Mumbai: Mittal Steel, the world''s largest steel company, headed by L N Mittal, which had last year announced its entry into oil and gas business through two joint ventures with the Oil and Natural Gas Corporation (ONGC), has now entered into separate deals with Total of France and Lukoil of Russia for acquisition of oilfields in Africa and Central Asia.
Mittal Steel has already on its own picked three per cent stake in Chevron''s under-construction $6 billion Olokola Liquefied Natural Gas (OK-LNG) project in Nigeria. The OK-LNG field is expected to produce 4.5-million tonnes per annum of LNG. Mittal Steel is also looking at taking stake in big oil and gas projects in Africa and Central Asia.
Steel tycoon Lakshmi Mittal who is not happy with the progress of ONGC-Mittal Energy Services Ltd (OMESL), a joint venture company that was to trade and ship oil and gas, including LNG, is showing the first signs of falling apart of the pact, industry sources said.
In June, this year, Mittal Steel had signed a pact with Total to jointly acquire oil and gas properties, particularly in Africa, and trade in oil and gas produced from such fields. The company also entered into an agreement with Lukoil for specific acquisitions in Central Asia, particularly in Kazakhstan, last month.
ONGC-Mittal Energy Ltd (OMEL) has landed three oil blocks in Nigeria, but progress on OMESL had been slow due to ONGC''s new management losing interest in the venture.
ONGC, meanwhile, has signed a deal with the Hinduja group for sourcing of LNG and is negotiating an OMEL-type agreement with the multi-billion dollar group.