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Updated: November 18, 2009 23:50 IST

Mittal pulls out of OVL’s Kazakh project

Special Correspondent
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A file picture of Lakshmi Mittal.
The Hindu A file picture of Lakshmi Mittal.

OVL had sought permission from the Cabinet for $400 m investment in the field

Steel magnate L. N. Mittal’s Mittal Investment Sarl has pulled out of a project to develop an oil field in Kazakhstan in partnership with ONGC Videsh Ltd. (OVL).

Mittal Investment Sarl, the holding company of the Mittal family, had used the Kazakhstan Government’s influence to find its way into the Satpayev oilfield in the Caspian Sea where OVL was shortlisted for a stake. However, just on the eve of signing an agreement for the field, Mittal Investment decided to pull the plug, official sources said here.

OVL which had in 2007 relented to the Kazakhstan Government’s condition of getting Mittal in the highly prospective field has written to Almaty, saying the 25 per cent stake in Satpayev would now be acquired by it and not by ONGC-Mittal Energy Ltd. (OMEL), the joint venture it had with Mittal.

Mittal was also looking at selling its 50 per cent stake in Caspian Investments Resources (CIR), which it acquired from the Russian oil firm LUKoil for $980 million. CIR acquisition was originally to be done by OMEL but Mr. Mittal went ahead on his own citing opposition to OMEL from Lukoil. Mittal Investment now wants to exit from all of the oil and gas projects in Kazakhstan.

OVL had anticipated that Mittal might not continue with Satpayev and so, a few months ago, had sought specific permission from the Cabinet for going ahead with investing the entire $400 million in the field on its own. OVL on November 17 had written to the Kazakhstan Government on Satpayev. Kazakh national oil firm KazMunaiGas will be the operator of the field, holding the remaining 75 per cent stake. An Exploration and Production Contract would be signed soon.

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