Steel baron Lakshmi N. Mittal has pulled out of a joint venture with ONGC Videsh Ltd, formed for exploring oil in a block in Kazakhstan.
Mittal Investment Sarl has decided to discontinue participation through the joint venture vehicle ONGC Mittal Energy Ltd (OMEL) in the Satpayev exploration block, Oil and Natural Gas Corp (ONGC) said in a release.
"As a consequence, ONGC Videsh will be the sole partner of KMG (KazMunayGas) and replace OMEL in the Satpayev Exploration and Production contract with the participating interest of 25 percent”" it said.
KMG is the national oil company of Kazakhstan.
Earlier, ONGC Videsh was in long negotiations with KMG over the proportion of interests. With the formation of OMEL in 2005, the Mittal group also joined the talks, culminating in the agreement signed in January 2009.
At that time, Mittal Investment had offered an interest to ONGC Videsh in its share of Caspian Investment Resources Ltd.
"ONGC Videsh examined the proposal and conveyed its non-interest in joining the projet," said the press release.
Signing of the exploration and production agreement is awaiting approval of the government of Kazakhstan, which is expected to be received shortly.
ONGC had formed two joint venture companies with Mittal Investment, one was OMEL and the other was ONGC Mittal Energy Services. Recently, it was decided to merge the latter with the former, after the ONGC board cleared it in October.
OMEL is still operating a producing block in Syria and has assets in Nigeria.