Oil and Natural Gas Corp today said its energy trading joint venture with steel tycoon Lakhsmi Mittal will be merged with their exploration tie-up, but did not tell why it failed to make equity contribution in the venture.
ONGC had in 2005 formed two joint ventures with Mittal -- ONGC Mittal Energy Ltd for acquisition of oil properties and ONGC Mittal Energy Services Ltd for trading and shipping of oil and gas, including liquefied natural gas.
"The co-promoters have since mutually decided to collapse OMESL into OMEL, with a view that any trading and shipping activity in the future can be undertaken through OMEL itself," ONGC said in a statement.
It said OMESL was to trade and ship oil and gas, primarily those produced from properties owned by OMEL. "While OMEL is currently having a producing oil asset in Syria and exploratory blocks in Nigeria, OMESL has been a dormant firm as the co-promoters mutually consented not to pursue purely trading and shipping activities," ONGC said.
ONGC, however, did not say it had not contributed its share of $5 million towards equity of OMESL and the company had survived till now only on Mittal's equity share. Also it did not say that Mittal had in August 2006 written to the Government against ONGC's attempts to derail the venture.
A source in ONGC board said the new management did not want to pursue the venture after the exit of its flamboyant chairman Subir Raha in 2006.