Explore More: Mittal, HPCL may tie up for oil hunt
The Mittal group, which has a tie-up with ONGC to explore gas in overseas blocks, may participate in the next bidding round of New Exploration Licensing Policy VII.
By Rajeev Jayaswal, TNN |
NEW DELHI: Steel czar LN Mittal could be tanking up for a new energy drive in India, this time around, in the oil and gas exploration business. Sources in the know said that the Mittal group could be a prospective partner in HPCL’s exploration arm Prize Petroleum Company (PPCL), which is planning a rights issue.
ICICI Bank, a joint venture partner in PPCL, has expressed its unwillingness to subscribe to the issue and is willing to offload its stake to a strategic third partner. While HPCL has 50% stake in PPCL, ICICI Bank and HDFC hold 45% and 5% equity stake, respectively.
Mittal had recently acquired a 49% stake in HPCL’s Bhatinda refinery and is understood to have started talks for participating in HPCL’s Vizag refinery-cum-petrochemicals complex. The Mittal group, which has a tie-up with ONGC to explore and gas in overseas blocks, may participate in the next bidding round of New Exploration Licensing Policy (Nelp-VII).
On an earlier occasion, Union petroleum minister Murli Deora had expressed confidence of the Mittal group participating in the next round of bids. Considering this, an equity in Prize Petroleum could pave the way for the Mittal group to explore the Indian sedimentary basins, an expert said.
HPCL officials confirmed that ICICI Bank is willing to renounce its rights shares in favour of a third party, who is yet to be identified. “The third party/parties to be identified would be based on a transparent process and acceptable to HPCL,” a senior official said. It was too early to name any prospective partner, officials added.
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HPCL is keen on raising equity capital for Prize Petroleum to meet its growing fund requirements. Currently, PPCL’s authorised capital is Rs 20 crore. It needs to mobilise about Rs 135 crore immediately to meet contractual obligations for the next two years.The company, which had a humble beginning in E&P sector, has acquired the status of an independent operator over a period of time. Recently, it was awarded the contract for developing offshore marginal fields in Cluster Seven near Mumbai High offshore in partnership with HPCL and M3 Energy.
Prize Petroleum has also won contracts for operating marginal fields of ONGC at Hirapur, West Bechraji and Khambel. It has also acquired 50% share in Sanganpur oilfield. The consortium of Prize Petroleum with GSPC, Jubilant Empro and Geoglobal Resources has been awarded the Block CB-ONN-2002/3 in the Cambay Area. The production sharing contract for the same was signed in February, 2004.
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