ONGC tying up with Mittal for oil fields

ONGC tying up with Mittal for oil fields

Agence France-Presse, New Delhi

Leading Indian oil producer ONGC is planning to team up with LN Mittal group, the world's biggest steel producer, to acquire oilfields, build refineries and lay pipelines abroad, officials said on Saturday.

The move comes as energy-hungry India, Asia's fourth-largest economy, aggressively seeks stakes in foreign oil and gas projects and is moving to strengthen ties with large energy producers.

ONGC, or Oil and Natural Gas Corp., was due to sign two agreements with Indian-born tycoon L.N. Mittal's group later on Saturday, officials said.

One venture with the parent ONGC company will invest in projects for refining, trading and transporting oil and gas, officials said.

The other venture with ONGC's foreign arm, ONGC Videsh, will invest in acquisition of oil and gas companies and energy fields abroad.

"We need their strength of global business, resources, expertise and knowledge for doing business globally," ONGC chairman Subir Raha told reporters.

"Combined with our strengths of expertise in oil and gas, we see a lot of synergy," he said.

India imports 70 percent of its crude oil needs and produces scarcely half the gas it requires. The country's fuel import requirements are seen growing rapidly as its economy surges.

ONGC will hold 51 percent stakes in both joint ventures while the Mittal group will hold the remaining 49 percent.

No other financial details were available.

ONGC wants to capitalise on the Mittal group's presence in oil and gas-rich countries in Central Asia and Africa where India is pursuing exploration and other activities, officials said.

"We have businesses in different countries where oil is important," Mittal told India's Aaj Tak television network.

"We're doing business with oil exporting countries and the governments there have been saying, 'Please invest in oil when you do so much in steel'," he said.