NEW DELHI, July 23: India’s leading oil producer ONGC teamed up on Saturday with the world’s biggest steel producer, Mittal Steel, to seek oilfields, build refineries and lay pipelines abroad.
State-run ONGC’s tie-up with Indian-born billionaire Lakshmi Mittal’s group comes as energy-hungry India, Asia’s fourth-largest economy, aggressively chases stakes in foreign oil and gas projects.
ONGC chairman Subir Raha and Mittal said the deal to set up two joint venture companies was aimed at assuring energy security for India’s fast-growing economy.
We need their strength of global business, resources, expertise and knowledge for doing business globally, Raha told reporters. Combined with our strengths of expertise in oil and gas, we see a lot of synergy.
ONGC, or Oil and Natural Gas Corp, which has been spearheading India’s quest for energy supplies abroad, signed two memorandums of understanding with Mittal’s group, officials said.
One venture with the parent ONGC company would invest in projects for refining, trading and transporting oil and gas, officials said.
The other venture with ONGC’s foreign arm, ONGC Videsh, would invest in acquisition of oil and gas companies and energy fields abroad.
Our business is in (oil-producing) nations and the nations have been requesting us to look at the oil business. Jointly we can play a very important role in securing energy security for the country, Mittal said, according to the Press Trust of India.
India imports 70 per cent of its crude oil needs and produces just half the gas it requires. The fuel import requirements of the country of more than one billion people are seen growing rapidly as its economy surges.
ONGC will hold 51 per cent stakes in both joint ventures while the Mittal group will hold 49 per cent.
ONGC wants to capitalise on the Mittal group’s presence in oil and gas-rich countries in Central Asia and Africa where India is pursuing exploration and other activities, officials said.
We’ve businesses in different countries where oil is important, Mittal said. “We’re doing business with oil exporting countries and the governments there have been saying, ‘Please invest in oil when you do so much in steel.’ “
Mittal’s flagship Mittal Steel has manufacturing units in 14 countries and sales and marketing offices in 11 nations.
“This is a deal where technical expertise comes from ONGC and global business experience comes from Mittal Steel,” ONGC’s Raha said.
The Mittal group has a strong presence in Kazakhstan where ONGC is seeking the Kurmangazy oilfield, besides interests in the Makhambet and Satpayev exploration blocks. We may use the Mittal group’s influence to get these deals through, an Indian government official added.—AFP