Mittal violates ONGC pact
Lakshmi N.Mittal violates his agreement with Oil and Natural Gas Corp (ONGC) to pursue hydrocarbon opportunities exclusively with the flagship Indian firm. Lakshmi N.Mittal manages the world’s largest steel company.
An ONGC official was quoted as saying by a national news agency that though Lakshmi N.Mittal signed a joint venture agreement with the state-run firm to form ONGC-Mital Energy in June 2005, for acquisition of oil and gas fields, refinery business and LNG projects.
Mr.Mittal recently decided to go it alone in investing Rs.3,300 crore in the Bhatinda refinery. An official said that the July 24, 2005 agreement had remarked 27 countries for exclusive pursuit for hydrocarbon opportunities by OMEL. The official said that it clearly stated that Lakshmi N.Mittal shall offer ONGC Videsh a partnership in any venture it wishes to undertake in the hydrocarbon sphere. He added that Nigeria and Kazakhatan fall under the 27 exclusive countries marked for OMEL.
Clause 2.4 of the 2005 agreement reads that in the event Mr.Mittal or any of it affiliates was desirous of undertaking any venture or business opportunity in the hydrocarbons business in areas other than the Territories, Lakshmi N.Mittal should invite OVL, to the extent permissible and in the manner and with such information about such venture or business opportunity as it deems fit to participate in such venture or business opportunity together with Lakshmi N.Mittal.
