Mittal acquires Lukoil''s 50 per cent stake in Kazakh firm for $980 million
26 Apr 2007
Mumbai: Steel tycoon Lakshmi N Mittal has acquired
Russian oil firm Lukoil''s 50 per cent stake in a Kazakhstan
oil firm for $980 million (around Rs4,000 crore), marking
his first major deal in the oil sector.
Mittal Investments will also take over half of Caspian
Investments Resources Ltd''s (CIR) outstanding debt,
which is equivalent to about $175 million, Moscow-based
Lukoil said in a statement.
CIR, the 100 per cent investment arm of Lukoil Overseas
has now become a joint venture between Mittal Investments
and Lukoil Overseas.
CIR has equity in five Kazakh oil fields - Alibekmola,
Kozhasai, Northern Buzachi, Karakuduk and Arman - in
the Aktyubinsk and Mangistau regions. The fields, which
have proven reserves of some 270 million barrels, currently
produces more than 40,000 barrels per day. The output
will be stepped up in the coming years.
Mittal has formed a joint venture with the Oil and Natural
Gas Company (ONGC) for undertaking exploration activities
outside India and some officials in ONGC see the acquisition
as violation of the pact unless Mittal transfers the
stake to the joint venture firm, ONGC-Mittal Energy
Ltd.
"Mittal had promised us that the stake will be
transferred to OMEL once the transaction is complete.
Let us see if he keeps the promise now that has happened,"
an ONGC executive said.
Mittal
and ONGC had in July 2005 agreed to participate on an
exclusive basis through OMEL in Angola, Azerbaijan,
Congo Brazzaville, Democratic Republic of Congo, Indonesia,
Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan
and Uzbekistan.
Kazakhstan is one of the 10 countries Mittal had originally
identified for exclusive pursuit of hydrocarbon opportunities
in joint venture with Oil and Natural Gas Corp (ONGC).