ONGC Mittal Energy wins Nigerian block

ONGC Mittal Energy, the joint venture company floated by ONGC and Mittal Steel, has won a highly prospective oil block in Nigeria.

The JV company bid $100 million for Nigeria's OPL-246 after the licence of South Atlantic Petroleum (Sapetro) for the block was revoked, industry sources said.

The joint venture outbid INC Natural Resources and BG-Sahara at an auction held on October 4 shortly after Sapetro lost a legal challenge against a government decision to revoke the licence.

OPL-246 is the relinquished area of the billion-barrel Akpo oilfield of Sapetro, which is part-owned by Theophilus Danjuma, former defence minister of President Olusegun Obasanjo, who fell out with him after opposing a campaign to extend Obasanjo's hold on power.

ONGC had, in January, lost out on acquiring Sapetro's 45% stake in Akpo to China's CNOOC after the Indian government disallowed the state-owned firm from proceeding on the transaction where it was the highest bidder.

ONGC-Mittal has to pay 25% of the $100 million as signature bonus for OPL-246 this week, failing which it would lose the block to INC, which was designated the reserved bidder.

An ONGC official said the company was "studying the prospects" and will take a decision shortly on the issue.