After the decision of its partner Mittal Investment Sarl, owned by Lakshmi N. Mittal to walk out of the project, ONGC Videsh Ltd (OVL) has been forced to exit from a gas block in Trinidad and Tobago.
ONGC-Mittal Energy Ltd, the joint venture of OVL and Mittal Investment Sarl (MIS), had, in 2007, won the offshore block North Coast Marine Area-2 (NCMA-2), that is estimated to hold in-place reserves of two trillion cubic feet, beating Britain’s Centrica plc. However, due to economic slowdown and global recession, Mittal Investment Sarl decided to exit the project.
OMEL had 65 per cent interest in the block while Trinidad and Tobago’s State-owned oil firm Petrotrin had the remaining. Under the initial agreement, OMEL was required to carry Petrotrin during the exploration phase (OMEL contributing Petrotrin’s share of investment).
After the exit of MIS, OVL would have had to foot the entire $304 million exploration expenditure with Petrotrin not willing to share any risk. “We tried to get an international energy firm as partner but did not succeed so we had no option but to exit the block,” a senior OVL official said.
