ONGC-Mittal Energy Ltd gives up oil block in Nigeria

ONGC-Mittal Energy Ltd gives up oil block in Nigeria

ONGC Mittal Energy Ltd (OMEL), a joint venture between ONGC Videsh Ltd and Mr. Lakshmi Mittal’s Mittal Investment Sarl, has relinquished an oil block in Nigeria after the federal government refused to relieve it of a $6 billion downstream investment commitment, reported Bloomberg.
OMEL – a joint venture of ONGC Videsh and Mittal Investment Sarl – had in 2005 won right to explore for oil and gas in offshore OPL-279 and OPL-285 blocks after committing to invest $ 6 billion in an 180,000 barrels per day greenfield refinery, a 2,000 MW power plant or a railway line from east to West of Nigeria. It paid a signature bonus of $ 50 million for OPL-285 and $ 75 million for OPL-279.
It offered to continue with the other block OPL-285 provided Nigeria relieved it of the $ 6 billion commitment. Since the government did not agree to the waiver, OMEL transferred its 64.33 per cent stake in the block to partners Total SA of France and EMO Exploration and Production Ltd, a local Nigerian company according to various news reports.
The company had apparently in 2012 relinquished block OPL-279 after prospective hydrocarbon zones did not offer any viable commercial development.
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