ONGC may rope in Hindujas for oil hunt

After tying up with steel tycoon Lakshmi N Mittal, Oil and Natural Gas Corporation (ONGC) is roping in the diversified, multi-billion dollar Hinduja group for acquiring oilfields abroad and sourcing liquefied natural gas.

While ONGC roped in the Mittal group to use its "influence" in African and central Asian countries to acquire oil and gas fields, the state-run firm was tapping the Hindujas to leverage their business relations in oil and gas-rich West Asia, industry sources said.

A formal agreement to float a 51:49 joint venture, similar to ONGC Mittal Energy Ltd formed last year, is likely to be signed this month.

The ONGC-Hinduja venture has identified seven countries "" Iran, Qatar, Kuwait, Libya, Oman, Saudi Arabia and the UAE "" for acquiring stakes in oil and gas fields and firming up liquefied natural gas supplies.

Though ONGC Mittal Energy Ltd had identified Kazakhstan, Turkmenistan, Azerbaijan, Uzbekistan, Congo, Angola, Trinidad and Tobago, Romania and Indonesia as priority areas for doing business, the joint venture has managed to land two blocks in Nigeria.

Sources said ONGC had last year signed a memorandum of understanding with Ashok Leyland Project Services, a Hinduja group company, to float a 50:50 joint venture to invest in liquefied natural gas terminals with associated power, petrochemicals and gas pipeline grid projects, and related opportunities in southern India.

The agreement called for the Hindujas to play a lead role in importing up to 10 million tonnes of liquefied natural gas a year and jointly set up power plants with a capacity of 1,000-1,800 Mw.

However, the agreement could not be implemented due to objections from government directors on the ONGC board. After much debate and consideration, a fresh agreement had been approved, which would be signed later this month, sources said.

They said ONGC was keen to leverage the clout of the Hindujas in the Persian Gulf, particularly in Iran and Qatar, for sourcing liquefied natural gas for its proposed Rs 25,000 crore Mangalore integrated project.

India has already signed a $22-billion deal with Iran to import 7.5 million tonnes of liquefied natural gas every year from 2010. But Tehran was not honouring its commitment and ONGC felt the Hindujas, who enjoy considerable influence in Iran, could help, sources said.

Previously, the Hindujas had signed an agreement with Indian Oil Corporation for the latter's proposed liquefied natural gas terminal at Ennore but the project could not take off.