Mittal, ONGC look to Nigeria

After Kazakhstan, India exploring opportunities in Africa.

After a failed attempt at buying PetroKazakhstan, the LN Mittal group and Oil and Natural Gas Corporation (ONGC) are now exploring investment opportunities in Nigeria.

Nigerian President Olusegun Obasabjo has written to the Mittals seeking investments in export-oriented refineries, liquefied natural gas projects and railways. The Indian government is using the opportunity to seek exploration and production (E&P) contracts in the African nation.

The Mittal group is now facilitating meetings in India for a ministerial delegation from Nigeria, which is expected to arrive on Monday. The delegation will hold discussions with ONGC regarding E&P projects on Tuesday.

The involvement of the Mittals comes after a meeting between Lakshmi Niwas Mittal, chairman and chief executive of Mittal Steel, and Obasabjo, on September 12 in Madrid.

Obasabjo has pledged support to the world's biggest steel producer and ONGC's involvement in the Nigerian petroleum sector appears inevitable with the firm having entered into an agreement with the Mittals.

ONGC and Mittals have floated a joint venture, ONGC Mittal Energy, for oil and gas business abroad. A second JV for trading and shipping is proposed to be set up shortly.

The Nigerian government wants E&P offers to come with a development package, which shall include setting up of refineries and infrastructure like roads and railways.

"A whole package can be implemented by India successfully through the involvement of ONGC in E&P, Indian Oil in refining and GAIL (India) Ltd in gas pipeline," said an official.

In August, ONGC Videsh Ltd (OVL) did not get majority stake in two large deepwater blocks in Nigeria despite being the top bidder at $485 million.

The Korea National Oil Company won 65 per cent control in the blocks, with OVL getting only a 25 per cent stake. The South Koreans had signed an agreement to invest up to $6 billion to set up a power plant, a rail transport system and a gas pipeline.