RAMAKANTH
17-11-2007, 01:58 AM
RIYADH: Deals for two Nigerian exploration acreages struck by ONGC-Mittal Energy Ltd - a joint venture between flagship explorer Oil and Natural Gas Corporation and NRI steel baron LN Mittal - could be under scanner, with the new dispensation in Lagos deciding to review oil contracts awarded during the previous regime in the wake of pay-off complaints.
“We are reviewing award of blocks by the previous government. There were complaints about the procedure used in award of some of the blocks and we are now investigating that,” Nigeria’s minister of state for energy (petroleum) Odein Ajumogobia said on the sidelines of the third Opec Summit here.
Asked specifically if the contracts secured by ONGC-Mittal were under scanner, the minister said: “I don’t remember if the (two) blocks awarded to ONGC-Mittal (combine) are also under review.”
But one senior official accompanying the minister said on condition of anonymity that the deals for blocks OPL 285 and OPL 279 would also be part of the scrutiny.
The official said the companies - Nigerians and foreign - would lose acreages if it was found during scrutiny that they had obtained the licences “through back door”.
ONGC-Mittal had in 2005 won rights to the two acreages after committing to invest $6 billion in setting up a 180,000-bpd (barrels per day) refinery, a 2,000 mw power plant and an east-west railway. ONGC-Mittal paid a signature bonus of $50 million for OPL 285 and $75 million for OPL 279.
In a subsequent licensing round, which happened just before the elections earlier this year that saw a new government, ONGC-Mittal was given preferential bidding rights for yet another acreage, OPL 250, but it did not submit any bid. Preferential bidding rights are akin to first right of refusal where the chosen company has the right to match the highest bid for the block and bag the acreage on offer.
ONGC-Mittal’s decision against bidding for the block in spite of the preferential right is reported to have been spurred by Mittal’s advice.
“We are reviewing award of blocks by the previous government. There were complaints about the procedure used in award of some of the blocks and we are now investigating that,” Nigeria’s minister of state for energy (petroleum) Odein Ajumogobia said on the sidelines of the third Opec Summit here.
Asked specifically if the contracts secured by ONGC-Mittal were under scanner, the minister said: “I don’t remember if the (two) blocks awarded to ONGC-Mittal (combine) are also under review.”
But one senior official accompanying the minister said on condition of anonymity that the deals for blocks OPL 285 and OPL 279 would also be part of the scrutiny.
The official said the companies - Nigerians and foreign - would lose acreages if it was found during scrutiny that they had obtained the licences “through back door”.
ONGC-Mittal had in 2005 won rights to the two acreages after committing to invest $6 billion in setting up a 180,000-bpd (barrels per day) refinery, a 2,000 mw power plant and an east-west railway. ONGC-Mittal paid a signature bonus of $50 million for OPL 285 and $75 million for OPL 279.
In a subsequent licensing round, which happened just before the elections earlier this year that saw a new government, ONGC-Mittal was given preferential bidding rights for yet another acreage, OPL 250, but it did not submit any bid. Preferential bidding rights are akin to first right of refusal where the chosen company has the right to match the highest bid for the block and bag the acreage on offer.
ONGC-Mittal’s decision against bidding for the block in spite of the preferential right is reported to have been spurred by Mittal’s advice.