Mittal''s stake in Bathinda violates pact: ONGC

26 March 2007

New Delhi: Steel baron Lakshmi N Mittal's acquisition of 49-per cent stake in Hindustan Petroleum's $3 billion Bathinda refinery violates the pact he had entered into with Oil and Natural Gas Corporation to pursue hydrocarbon opportunities exclusively an ONGC official said.

Though Mittal signed a joint venture agreement in July 2005 with ONGC to form ONGC-Mittal Energy for acquisition of oil and gas fields, refinery business and LNG projects, he recently decided to go it alone in investing Rs 3,300 crore in the Bathinda refinery.

Apart from this, Mittal has on his own bought 50 per cent stake in a Kazakhstan oil firm from Russia's Lukoil for $980 million and acquired 3 per cent stake in the $6 billion Chevron-operated Olokola LNG (OK-LNG) project in Nigeria.

The official said, "The July 24, 2005, agreement had earmarked 27 countries for exclusive pursuit of hydrocarbon opportunities by OMEL. For the rest of the world, it clearly stated that Mittal shall offer ONGC Videsh a partnership in any venture or business opportunity it wishes to undertake in the hydrocarbon sphere," added the official, who did not want to be named.

But there was no such restriction placed on ONGC, he said, adding that Nigeria and Kazakhstan fall under the 27 exclusive countries marked for OMEL.

Mittal and ONGC had agreed to participate on an exclusive basis through OMEL in the Schedule-I countries of Angola, Azerbaijan, Congo Brazzaville, Democratic Republic of Congo, Indonesia, Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan and Uzbekistan, the official said.