Mittal: Looking for more

Moscow/New Delhi, April 25 (PTI): Lakshmi N. Mittal has acquired Russian company LUKOIL’s 50 per cent stake in a Kazakhstan oil firm for $980 million (nearly Rs 4,000 crore). This is the first major oil deal by the India-born billionaire businessman.

Mittal Investments will also take over half of the outstanding debt — equivalent to about $175 million — of Caspian Investments Resources (CIR), Moscow-based LUKOIL said in a statement.

CIR has equity in five Kazakh oilfields — Alibekmola, Kozhasai, Northern Buzachi, Karakuduk and Arman — in the Aktyubinsk and Mangistau regions. Current production from the fields, which have total proven reserves of some 270 million barrels, is more than 40,000 barrels per day and will increase in the coming years.

Kazakhstan is one of the 10 countries Mittal had originally identified for exclusive pursuit of hydrocarbon opportunities in joint venture with the Oil and Natural Gas Corporation (ONGC). Some in ONGC see the acquisition a 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 closed. Let’s see if he keeps the promise now that has happened,” an ONGC executive said.

In July 2005, Mittal and ONGC had agreed to participate on an exclusive basis, through Omel, in Angola, Azerbaijan, Congo, Indonesia, Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan and Uzbekistan.

“Caspian Investments Resources, which was a 100 per cent subsidiary of LUKOIL Overseas, has become a joint venture of LUKOIL Overseas and Mittal Investments, where each holds 50 per cent,” LUKOIL’s press release said.

LUKOIL used Caspian Investments to buy Kazakh oil producer Nelson Resources for $2 billion in 2005.