Oil & Natural Gas Corporation has roped in another non-resident Indian business group for expanding its international reach.
NEW DELHI: After a tie-up with the Mittal Steel, the country’s biggest government-owned company, Oil & Natural Gas Corporation, (ONGC), has roped in another non-resident Indian business group for expanding its international reach.
ONGC will be entering into an MoU with the Hindujas-owned Gulf Oil Corporation for exploration in seven countries in the Gulf region.
These include Qatar, Iran, Saudi Arabia, the UAE, Kuwait and Libya.
The Hinduja group already have a lubricating-oil refinery in UAE and is involved in forward trading in oil in the region.
ONGC and the Hinduja group on Tuesday entered into a memoranda of understanding to form joint ventures to pursue global opportunities in liquefied natural gas (LNG) and linked exploration and production business.
The two companies will form joint ventures or unincorporated joint ventures with 49.98% equity holding by ONGC.
The Hindujas-owned Ashok Leyland Project Services (ALPS) will hold another 48.02%. Financial institutions and banks will hold the remaining 2%.
“The collaboration will leverage the E&P expertise of ONGC and the business-relationship advantage of the Hinduja group in the hydrocarbon-rich west Asia, with business prospectivity benefits to both entities,” said an ONGC release.
The MoU between ONGC and ALPS provides for sourcing of LNG at competitive terms through the networking abilities of ALPS.
Pursuant to such sourcing, ONGC will offer ALPS participation in joint development of LNG-based downstream projects at Mangalore SEZ. This would include LNG-regasification, power and petrochemicals projects.
ONGC chairman and managing director R S Sharma told DNA Money the Hindujas could take part through equity in the Mangalore LNG terminal.
“It is not decided as yet,” he said.
He said the combined strength of both entities will help provide fillip to the energy security of the nation. Sanjay Hinduja, representing the Hinduja Group, said that the joint venture, once formed, will aim to bring concrete results as envisaged in this collaboration.
ONGC had earlier too in April 2005 signed a MoU with the ALPS for Rs 25,000-crore mega project. The London-based Hinduja brothers enjoyed political clout in Iran and Qatar and had at that time assured 5 million tonne LNG supply to ONGC of which it planned to use 0.8 mt for its power plant. The group had signed a similar MoU with Indian Oil Corporation earlier.
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