NEW DELHI: Indian-born billionaire Lakshmi Narain Mittal, after the successful takeover of steel giant Arcelor, is now aggressively turning his attention to the oil and gas sector aiming to acquire oil assets, providing support services and trading in crude oil.

Apart from partnering with State-run Oil and Natural Gas Corporation (ONGC), Arcelor has now firmed a new tie-up with Hindustan Petroleum Corporation Limited (HPCL) to bid for a majority stake in a Nigerian refinery.

This development comes close on the heels of the HPCL-Mittal joint venture for execution of the Bhatinda Refinery project in Punjab.

Interestingly, ONGC Mittal Energy Limited has already acquired two oil blocks in Nigeria that are expected to produce 6.50 lakh barrels of oil per day when production commences.

Investments

The investments will flow through Mittal Investment Sarl, the Luxembourg-registered Mittal family firm that holds 38 per cent stake in Mittal Steel Company.

The company has already committed an investment of Rs. 3,300 crore for taking 49 per cent stake in HPCL's Rs. 15,700 crore Bhatinda refinery in Punjab. The formal agreement for the joint venture in the Bhatinda refinery project is likely to be signed on March 2 when Mr. L.N. Mittal is scheduled to be in Delhi.

The Mittals have also formed a 50:50 joint venture with HPCL to bid for 51 per cent stake in the 9 million tonnes Port Harcourt refinery in Nigeria, where the government has invited expression of interest for a strategic partner.

The HPCL chairman, B. M. Lal, said the vast presence of the Mittal group across the globe could be used for acquiring refineries and natural gas businesses.

Mr. Lal said the two sides were also discussing Mittals' partnership in HPCL's Vizag petrochemical complex and possible forays into Russian oil fields.

The HPCL-Mittal combine would lay a 1,100-km crude oil pipeline from Mundra port in Gujarat to Bhatinda and build a crude oil terminal.

Once a joint venture agreement is signed, Mittal Investments would be required to deposit $100 million in an escrow account.

The amount can be withdrawn only if the government rejects the joint venture. The approval of the Foreign Investment Promotion Board (FIPB) and Cabinet Committee on Economic Affairs (CCEA) are pre-requisites to the formation of the joint venture, as both the companies would invest over Rs. 1,000 crore.

The present FDI limit in public sector refineries is 26 per cent and the Petroleum Ministry is learnt to have requested to increase the limit to 49 per cent.

"We are confident that this being the first such case, it will get favourable consideration from the FIPB,'' Petroleum Secretary M. S. Srinivasan said.

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