LN Mittal buys Kazakh oil co for $980 mln
In his first major oil deal, billionaire Lakshmi N Mittal has acquired Russian oil firm Lukoil’s 50% stake in a Kazakhstan oil firm for $980 million (nearly Rs 4,000 crore). Mittal Investments will also take over half of Caspian Investments Resources (CIR) outstanding debt, which is equivalent to about $175 million, Moscow-based Lukoil said in a statement.
CIR has equity in five Kazakh oil fields—Alibekmola, Kozhasai, Northern Buzachi, Karakuduk and Arman—in the Aktyubinsk and Mangistau regions. Current production from the fields, which have total proven reserves of some 270 million barrels, is more than 40,000 barrels per day and is set to increase in the coming years.
Kazakhstan is one of the 10 countries Mittal had originally identified for exclusive pursuit of hydrocarbon opportunities in joint venture with Oil and Natural Gas Corp (ONGC).
Some in ONGC see the acquisition as violation of the pact unless Mittal transfers the stake to the joint venture firm, ONGC-Mittal Energy Ltd.
“Mittal had promised us that the stake will be transferred to OMEL once the transaction is complete. Let’s see if he keeps the promise now that has happened,” an ONGC executive said in New Delhi.
Mittal and ONGC had in July 2005 agreed to participate on an exclusive basis through OMEL in Angola, Azerbaijan, Congo Brazzaville, Democratic Republic of Congo, Indonesia, Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan and Uzbekistan.
“Caspian Investment Resources, which was Lukoil Overseas’ 100% subsidiary, has become a joint venture of Lukoil Overseas and Mittal Investments, where each holds 50%,” Lukoil’s press release said.
Lukoil used the unit, Caspian Investments Resources Ltd, to buy Kazakh oil producer Nelson Resources for $2 billion in 2005.
Caspian Investments will also hold a 25% stake in Zhambay Llp, which is exploring offshore deposits in the Caspian Sea, Lukoil said in December.
Lukoil’s president Vagit Alekperov said the decision to sell the 50% stake was linked to Mittal’s strong political connections in Kazakhstan.
The alliance would increase Lukoil’s chances to acquire new assets in the region, Alekperov hoped.
Mittal Investments is the controlling shareholder of Arcelor Mittal, the world’s biggest steel company which is majority owned by the family of India-born Lakshmi Mittal.
CIR has equity in five Kazakh oil fields—Alibekmola, Kozhasai, Northern Buzachi, Karakuduk and Arman—in the Aktyubinsk and Mangistau regions. Current production from the fields, which have total proven reserves of some 270 million barrels, is more than 40,000 barrels per day and is set to increase in the coming years.
Kazakhstan is one of the 10 countries Mittal had originally identified for exclusive pursuit of hydrocarbon opportunities in joint venture with Oil and Natural Gas Corp (ONGC).
Some in ONGC see the acquisition as violation of the pact unless Mittal transfers the stake to the joint venture firm, ONGC-Mittal Energy Ltd.
“Mittal had promised us that the stake will be transferred to OMEL once the transaction is complete. Let’s see if he keeps the promise now that has happened,” an ONGC executive said in New Delhi.
Mittal and ONGC had in July 2005 agreed to participate on an exclusive basis through OMEL in Angola, Azerbaijan, Congo Brazzaville, Democratic Republic of Congo, Indonesia, Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan and Uzbekistan.
“Caspian Investment Resources, which was Lukoil Overseas’ 100% subsidiary, has become a joint venture of Lukoil Overseas and Mittal Investments, where each holds 50%,” Lukoil’s press release said.
Lukoil used the unit, Caspian Investments Resources Ltd, to buy Kazakh oil producer Nelson Resources for $2 billion in 2005.
Caspian Investments will also hold a 25% stake in Zhambay Llp, which is exploring offshore deposits in the Caspian Sea, Lukoil said in December.
Lukoil’s president Vagit Alekperov said the decision to sell the 50% stake was linked to Mittal’s strong political connections in Kazakhstan.
The alliance would increase Lukoil’s chances to acquire new assets in the region, Alekperov hoped.
Mittal Investments is the controlling shareholder of Arcelor Mittal, the world’s biggest steel company which is majority owned by the family of India-born Lakshmi Mittal.
