ONGC not keen on venture with Mittal Steel

Steel tycoon Lakshmi N Mittal may have muscled acquisition of European giant Arcelor but his ambition to make it big in the oil and gas sector in India may come unstuck as its partner ONGC does not appear too keen on the venture the two giants had agreed to last year.

Mittal last week wrote to the government about delays in shaping up of ONGC-Mittal Energy Services (OMESL), a JV company that was to trade and ship oil and gas (including LNG), industry sources said.

After the exit of high-profile Subir Raha, the brainchild of the coming together of India's largest oil and gas producer and the world's largest steel maker, ONGC has reversed several decisions of the July 2005 MoU.

Sources said ONGC has refused deputation of its employees to ONGC-Mittal Energy (OMEL) - the company formed to acquire oil and gas properties abroad and OMESL.

It has also reversed the decision to open an office in Delhi, sources said adding the Indian firm this month cancelled interviews for recruitment of professionals for OMEL.

The Mittal letter pointed to delays on the part of ONGC to register oil companies with OMESL, a pre-requisite to begin trading in crude oil and petro products.

Frustrated at the delays, Mittal is believed to have begun talking to global giants like Chevron, ExxonMobil for an oil trading venture.

Sources said ONGC was willing to continue with OMEL but with a skeletal staff. On OMESL, the PSU' new management has privately said the oil-trading business does not form its core competence and would therefore prefer to exit from it.