Oil and Natural Gas Corporation (ONGC) has been forced to exit from a gas block in Trinidad and Tobago after its partner Lakshmi N Mittal walked out of the project. ONGC-Mittal Energy Ltd (OMEL) — the joint venture of ONGC Videsh Ltd and Mittal Investment Sarl — 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.
But last year, Mittal Investment Sarl (MIS) decided to exit the project possibly because of global economic downturn.
“When we had bid for the block in Trinidad and Tobago, we had consciously decided not to take more than 51 per cent stake. After the exit of MIS we had the option of doing the project entirely on our own but that did not fit into our scheme of things,” an OVL official said.
OMEL had 65 per cent interest in the block while Trinidad and Tobago’s state-owned oil company 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 — the overseas investment arm of ONGC — would have to foot the entire $304 million exploration expenditure with Petrotrin not willing to share any risk.
