ONGC Videsh Ltd has turned down an offer to buy steel tycoon Lakshmi N Mittal's stake in a Kazakhstan oil company after its request for data on the project did not elicit any response. Mittal's holding company,Mittal Investments Sarl,had in April,2007,bought half of Russian LUKoil's 50 per cent stake in Caspian Investment Resources for USD 980 million. Two years later,it started looking for an opportunity to sell the shareholding and offered the stake to OVL,the overseas investment arm of state-owned Oil and Natural Gas Corp (ONGC),two persons familiar with the development said. "OVL sought certain information on the fields like deposits it had,future production profile and prospects,but did not get a response from MIS," one of them said. "OVL stopped pursuing the opportunity after that." Industry sources said OVL may have declined Mittal's offer because it thought the company was a sinking ship with oil production falling and actual reserves not matching the announced ones. Interestingly,LUKoil which had a pre-emptive right to buy the stake,has also dropped plans to buy MIS's shareholding. Mittal Investment and LUKoil now hold a 25 per cent stake each in Caspian Investment Resources (CIR),while the rest is with Kazakhstan's KazMunaiGaz. Sources said CIR was to be originally acquired by ONGC-Mittal Energy Ltd,the equal joint venture of OVL and MIS,but the India-born billionaire went ahead on his own,citing opposition to OMEL from Lukoil. He later delayed transferring the assets to OMEL,citing opposition to such a move by the Kazakhstan government. MIS is now looking at selling its entire holding in CIR and sources said Kazakhstan's state-owned KazMunaiGaz E&P may be looking to buy Mittal's stake. LUKoil had in 2005 acquired Canada's Nelson Resources (later renamed the CIR) for USD 2 billion. CIR owns stakes in four oil fields in Kazakhstan - Alibekmola and Kozhasai (on an equal basis with KazMunaiGaz),North Buzachi (50 per cent with China's CNPC) and Arman (50 per cent with Shell) and 100 per cent in the mining project Karakuduk. The proved and probable hydrocarbon reserves of these deposits are 269.6 million barrels. Current production from the fields is more than 40,000 barrels per day and is set to increase in the coming years. Sources said Mittal had last year pulled out of the Satpayev oilfield in the Caspian Sea. MIS had used the Kazakh government to muscle its way into the Satpayev oilfield where OVL was shortlisted for a stake. However,just on the eve of signing an agreement for the field,MIS announced it was no longer interested.
