ONGC-Mittal bags oil blocks in Nigeria

Nigeria has awarded ONGC Mittal Energy Ltd (OMEL) deep water oil exploration blocks with a potential of producing 6,50,000 barrels per day (bpd) for the next 25 years. It also offered an assured supply of 1,20,000 barrels of crude per day.

In exchange, OMEL plans to invest $6 billion in Nigeria on 2,000 Mw coal- or gas-based power plant, railway systems and capacity building. The company has also proposed setting up of an export-oriented refinery in Nigeria with a capacity of 1,80,000 bpd.

"It will be possible to start the delivery of 65,000 barrels per day in five-seven years time. Meanwhile, action should be taken to operationalise the offers made by Nigeria for the allocation of sweet crude and LNG at the earliest," Subir Raha, chairman, OMEL said at the signing ceremony.

According to the agreement, Nigeria has offered lifting rights for 1,20,000 barrels of crude per day on commercial basis, including 40,000 barrels per day lifted by the Indian refineries at present, a company statement said today.

Further, Nigeria has assured of substantial liquefied natural gas (LNG) offtake out of the government's share.

The Indian venture's investments will be proportional to the scale of oil discoveries under the agreement. The oil exploration blocks are yet to be identified. OMEL will also facilitate the upgrade of petroleum training institute at Effurun, Delta State.

The company will also develop required trading, shipping and terminalling facilities in Nigeria.

Joint working groups will be set up for developing definitive agreements and corresponding action plans for each of the component projects.