Mittal eyes 50% stake in HPCL arm Prize Petro
Steel baron Lakshmi N Mittal is eyeing to buy half of Hindustan Petroleum Corporation’s exploration arm Prize Petroleum for around Rs 200 crore.
By PTI |
NEW DELHI: Steel baron Lakshmi N Mittal is eyeing to buy half of Hindustan Petroleum Corporation’s exploration arm Prize Petroleum for around Rs 200 crore. Mittal, who made rapid advances in oil sphere this year — first with a 49% stake in HPCL’s Bathinda refinery and then partnering the state-run firm for a separate refinery on the east coast — is in talks with financial institutions to buy out 50% stake in Prize Petroleum, sources said.
The steel baron is looking for a medium-sized firm, mostly entrenched in E&P. “He has had looked at a few firms but nothing is finalised just now,” they said. Besides Mittal, Essar Oil, Jaiprakash Associates and L&T are other firms interested in buying a 50% stake in Prize Petroleum. HPCL holds the balance 50% in Prize.
Prize operates Cluster-7 field of ONGC and won two exploration blocks in the fourth and sixth rounds of auction under the New Exploration Licencing Policy (NELP).
The company plans to produce around 50,000 barrels of oil per day from Cluster-7 fields and believes its NELP-VI block in Madhya Pradesh holds three trillion cubic feet of gas reserves. ONGC had found gas in a well drilled on SR-ONN-2004/1 block in the Satpura-south Rewa basin, but could not test the discovery.
The block was then offered for bidding in NELP-VI and was won by Prize in association with Jaiprakash Associates. Prize is the operator of the block with 10% stake, while Jaiprakash has the remaining 90%. Prize has 15% in NELP-VI onland block CB-ONN-2002/3 in the Cambay basin where other partners are GSPC (55%), Jubilant Enpro (20%) and GeoGlobal (10%).
The entire $450 million cost of development will be borne by Prize. After becoming the world’s largest steel producer by acquiring Arcelor, the India-born billionaire is setting up his own oil division and wants to grow in the sector through inorganic growth — the way he has grown to become a steel baron.
Mittal, who got into oil business through a joint venture with state explorer ONGC, is on a lookout for a medium-sized oil company, the sources added.
The steel baron is looking for a medium-sized firm, mostly entrenched in E&P. “He has had looked at a few firms but nothing is finalised just now,” they said. Besides Mittal, Essar Oil, Jaiprakash Associates and L&T are other firms interested in buying a 50% stake in Prize Petroleum. HPCL holds the balance 50% in Prize.
Prize operates Cluster-7 field of ONGC and won two exploration blocks in the fourth and sixth rounds of auction under the New Exploration Licencing Policy (NELP).
The company plans to produce around 50,000 barrels of oil per day from Cluster-7 fields and believes its NELP-VI block in Madhya Pradesh holds three trillion cubic feet of gas reserves. ONGC had found gas in a well drilled on SR-ONN-2004/1 block in the Satpura-south Rewa basin, but could not test the discovery.
The block was then offered for bidding in NELP-VI and was won by Prize in association with Jaiprakash Associates. Prize is the operator of the block with 10% stake, while Jaiprakash has the remaining 90%. Prize has 15% in NELP-VI onland block CB-ONN-2002/3 in the Cambay basin where other partners are GSPC (55%), Jubilant Enpro (20%) and GeoGlobal (10%).
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For Cluster 7, which is estimated to hold recoverable reserves of 180 million barrels, Prize roped in Malaysian company M3nergy for pumping oil from the field that ONGC considered ‘marginal.’ ONGC will get 45% share of oil from the fields as royalty and will pay Prize Petroleum $35 per barrel for the remaining 55%. The entire $450 million cost of development will be borne by Prize. After becoming the world’s largest steel producer by acquiring Arcelor, the India-born billionaire is setting up his own oil division and wants to grow in the sector through inorganic growth — the way he has grown to become a steel baron.
Mittal, who got into oil business through a joint venture with state explorer ONGC, is on a lookout for a medium-sized oil company, the sources added.
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