ONGC's Kazakh deal to be inked by February
06 December 2010
Indian energy major ONGC Ltd will finally invest $400 million to acquire a 25-per cent stake in the Satpayev oil field in Kazakhstan. The agreement is expected to be signed by February.
S. Sundareshan, the oil secretary, said today that the deal is in the final stage and would hopefully be signed within the next two months. The initial agreement relating to the acquisition of a substantial stake was signed nearly two years ago when Nursultan Nazarbayev, the Kazakh president, visited India.
ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, was to partner with an investment unit of the Lakshmi Mittal group in acquiring the stake.
Kazakhstan had offered a 50-per cent stake to ONGC Mittal Energy, the joint venture. But less than a year later, the Mittal investment arm decided to pull out of the deal, forcing OVL to consider acquiring a 25 per cent stake on its own. The over 1,500 sq km Satpayev block holds 1.75 billion barrels of in-place oil reserves.
However, the deal got stuck with the Kazakh government apparently not showing much interest. On Monday, the eigth meeting of the India-Kazakhstan Inter-Governmental Commission (IGC) on Trade, Economic, Scientific, Technological, Industrial and Cultural cooperation was held on in New Delhi, and the deal relating to the 25-per cent acquisition by ONGC was revived.
Murli Deora, the Petroleum and Natural Gas minister, led the Indian, delegation, while Sauat Mynbayev, the Kazakh minister of Oil and Gas, represented his country. Kaz MunaiGas, the Kazakh national oil firm will operate the field and hold the remaining 75 per cent stake.