ONGC Mittal bags 2 blocks in Nigeria
OMEL has kicked off its oil safari in style. It has finally opened an oil account with two blocks - OPL 212 and 209 - in Nigeria, estimated to have reserves of about 500m barrels each and that too for a song.
By TNN |
NEW DELHI: ONGC Mittal Energy, (OMEL) has kicked off its oil safari in style. It has finally opened an oil account with two blocks — OPL 212 and 209 — in Nigeria, estimated to have reserves of about 500m barrels each and that too for a song.
Although, OMEL will be pumping in almost $6-bn back-to-back infrastructure support to Nigeria in return for the blocks, it has managed to acquire these blocks in the mini-bidding round by offering a signature bonus of just $50m and $65m respectively.
This comes at a time when acquisition of oil acreages is at an all-time high. A case in point is Sinopec’s recent bid for oilblocks in Angola where it bid a high of $1,100m for a single block. OMEL is also learnt to be in the hunt in Kazakhstan.
where the government is in the process of offering oil acerages.
OMEL is now in negotiations with the Nigerian government over the production sharing contract for the blocks. It is likely to take on board a local content vehicle partner for the oil blocks. OMEL which had the option of bidding for three blocks under this round opted to bid only for two. Sources close to the deal say that the two blocks which OMEL has acquired are amongst the best blocks that were on offer.
One of the relinquished blocks, which OMEL will now operate on a lease, is close to the Bongo fields of Shell — a discovered field with reserves of 1bn barrels. OPL 209, the other block, is close to the field operated by Exxon and Shell and has a reserve of 800m barrels.
“Proximity to these discovered fields and the geological reserves indicate a good potential for these blocks. OMEL, which has committed to investments in the infrastructure developments of Nigeria as part of the deal is expected to take up projects like refineries, pipelines etc,” a source said.
The process of getting a toe-hold in Nigeria was initiated in November last when the LN Mittal group used its proximity to the Nigerian government to initiate talks on the oil business.
OVL, which also participated in the mini-bidding round with the option of acquiring a block without investments in infrastructure decided to opt out of the race as the blocks on offer did not show enough prospect
Although, OMEL will be pumping in almost $6-bn back-to-back infrastructure support to Nigeria in return for the blocks, it has managed to acquire these blocks in the mini-bidding round by offering a signature bonus of just $50m and $65m respectively.
This comes at a time when acquisition of oil acreages is at an all-time high. A case in point is Sinopec’s recent bid for oilblocks in Angola where it bid a high of $1,100m for a single block. OMEL is also learnt to be in the hunt in Kazakhstan.
where the government is in the process of offering oil acerages.
OMEL is now in negotiations with the Nigerian government over the production sharing contract for the blocks. It is likely to take on board a local content vehicle partner for the oil blocks. OMEL which had the option of bidding for three blocks under this round opted to bid only for two. Sources close to the deal say that the two blocks which OMEL has acquired are amongst the best blocks that were on offer.
One of the relinquished blocks, which OMEL will now operate on a lease, is close to the Bongo fields of Shell — a discovered field with reserves of 1bn barrels. OPL 209, the other block, is close to the field operated by Exxon and Shell and has a reserve of 800m barrels.
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“Proximity to these discovered fields and the geological reserves indicate a good potential for these blocks. OMEL, which has committed to investments in the infrastructure developments of Nigeria as part of the deal is expected to take up projects like refineries, pipelines etc,” a source said.
The process of getting a toe-hold in Nigeria was initiated in November last when the LN Mittal group used its proximity to the Nigerian government to initiate talks on the oil business.
OVL, which also participated in the mini-bidding round with the option of acquiring a block without investments in infrastructure decided to opt out of the race as the blocks on offer did not show enough prospect
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