Shell, Total may partner ONGC Mittal in Nigeria bid

NEW DELHI: ONGC Mittal Energy (OMEL) is in advanced discussions with the Shell group and Total of France to take them on as equity partners in the Nigeria blocks, OPL 212 and 209. While Shell and ONGC’s foreign investment subsidiary OVL are partners in the Campos basin in Brazil and have entered into a broad agreement for joint investments in third countries, French oil major Total will open its partnership account with the Indian upstream major in the Nigerian blocks if the deal goes through.

When contacted, ONGC CMD RS Sharma said, “We are in talks with Shell and Total for our blocks in Nigeria. The companies have large expertise in these regions and we have broadly agreed to take them as partners in third-country investments.”
While 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 one-billion barrels, the other, OPL 209, is close to the one operated by Exxon and Shell, having reserves of 800 million barrels.

“Proximity to these discovered fields and the geological reserves indicate a good potential for the blocks. OMEL, which has committed to investments in the infrastructure developments of Nigeria as part of the deal, is expected to take up projects such as refineries, pipelines etc,” a source said.

The partnership with the companies was part of the larger strategic tie-ups by ONGC where they have entered into quid pro quo deals. “Shell had relinquished its first right in the Campos basin to enable a stake for OVL. It is only logical that similar stakes are offered where it makes commercial sense to have them as partners,” Mr Sharma said.

e in the PetroCanada bid in Khazakstan where they lost out to China. Although the equity being offered to Shell and Total is still to be firmed up, sources said that it could be 10-15%.

“However, OMEL is likely to take them on as joint operators in these fields,” sources said.

Shell had initially held some blocks in these region, which they had subsequantly relenquished. It is felt that their expertise and data on these fields could be used optimally to get the best returns from these fields.

These prospective blocks are estimated to have around $ 500 million barrels each and OMEL has pledged a back-to back investment of around $6 billion for infrastructure projects in Nigeria.