The Hindu Business Line : ONGC, Hinduja may sign pact

The joint venture
ONGC could leverage Hinduja's presence in Gulf.
11 countries have been identified for exploration and production.
Equity structure of the joint venture is likely to be on the lines of the ONGC-Mittal venture.

New Delhi , Nov. 6

State-owned ONGC, which is scouting for oil and gas projects, is expected to ink an agreement with Hinduja Group to jointly pursue such activities in India and overseas. Sources told Business Line that the two entities are set to sign an agreement on Tuesday.

As regards who would be the signatories from the Hinduja Group, industry sources said it could be either Gulf Oil Corp or Ashok Leyland Project Services or both of them.

According to industry grapevine, two new companies could be floated for jointly undertaking a wide range of oil and gas projects in India and abroad and also for LNG activities. The Hindujas are expected to be represented by Mr Sanjay Hinduja for signing the understanding.

This move of ONGC comes after forming a joint venture with the LN Mittal Group for oil and gas exploration and production (E&P) activities abroad. A formal tie-up between the Hindujas and ONGC has been in the news for some time now.

According to analysts, with this ONGC could leverage on the Hinduja's presence in the Gulf region.

The first joint venture company is expected to undertake projects in exploration and production, procurement of crude oil, LNG and condensate, besides shipping oil and gas.

According to sources, 11 countries have been identified.

The second joint venture will develop LNG terminals. The countries initially identified are Iran, Qatar, Kuwait, Libya, Oman, Saudi Arabia and the UAE.

The equity structure of the joint venture is likely to be on the lines of the ONGC-Mittal venture.

ONGC had last year signed a MoU with Ashok Leyland Project Services, a Hinduja Group company, to float a 50:50 joint venture to invest in LNG terminals with associated power, petrochemicals, gas pipeline grid projects and related opportunities in southern India.

However, the MoU could not be implemented due to objections from the Government directors on ONGC board.

After much debate and consideration, a fresh MoU has been approved, which would now be signed.