Steel czar Lakshmi N Mittal on Wednesday said he plans to transfer the Kazakhstan oil assets that he acquired from Russia’s Lukoil to his joint venture firm with ONGC Videsh Ltd, but officials at the state-run company remained skeptic if the promise will be fulfilled.

In his first major oil deal, Mittal had in April acquired

Russian oil firm Lukoil’s 50 per cent stake in Caspian Investments Resources for 980 million dollars.

The acquisition was to be done by ONGC Mittal Energy Ltd, the equal joint venture of OVL and Mittal Investment, but the India born billionaire went ahead on his own citing opposition to OMEL from Lukoil. He has since been delaying transferring the assets to OMEL citing opposition to such a move by the Kazakhstan government.

“We are in discussion and I think it (CIR) will be

transfered to OMEL,” Mittal told reporters on Wednesday. “There is a commitment (that) this joint venture has the first right.”

CIR has equity in five Kazakh oil fields – Alibekmola,

Kozhasai, Northern Buzachi, Karakuduk and Arman – in the Aktyubinsk and Mangistau regions. Current production from the fields, which have total proven reserves of some 270 million barrels, is more than 40,000 barrels per day and is set to increase in the coming years.

Kazakhstan is one of the 10 countries Mittal had originally identified for exclusive pursuit of hydrocarbon opportunities in joint venture with Oil and Natural Gas Corp (ONGC).

Some in ONGC see the acquisition as violation of the pact unless Mittal transfers the stake to the joint venture firm, OMEL.
“Mittal had promised us that the stake will be transferred to OMEL once the transaction is complete. He has done so till now. We formed a joint venture with him because of his clout with the governments in the Africa and Central Asia particularly Kazakhstan. Now he can’t walk out of the promise saying the Kazakhstan government is opposing the transfer,” an ONGC executive said in New Delhi.
Mittal and ONGC had in July 2005 agreed to participate on an exclusive basis through OMEL in Angola, Azerbaijan, Congo Brazzaville, Democratic Republic of Congo, Indonesia, Kazakhstan, Romania, Trinidad and Tobago, Turkmenistan and Uzbekistan.
Mittal Investment and Lukoil now hold 50 per cent stake each in Caspian Investment Resources Ltd. Lukoil had used Caspian Investments Resources Ltd to buy Kazakh oil producer Nelson Resources Ltd for 2 billion dollars in 2005.
Initially, OVL was also looking at acquisition of Nelson
Resources.
Mittal Investments is the controlling shareholder of
Arcelor Mittal, the world’s biggest steel company, which is in majority owned by the family of India-born Lakshmi Mittal.