India's State-run Oil and Natural Gas Corp (ONGC) has been forced to exit from a gas block in Trinidad & Tobago after its partner Lakshmi N Mittal walked out of the project, reports PTI.
ONGC-Mittal Energy Ltd (OEML)—the joint venture of ONGC Videsh Ltd (OVL) and Mittal Investment Sarl (MIS)—had in 2007 won the offshore block North Coast Marine Area-2 (NCMA-2), that is estimated to hold reserves of 2 trillion cubic feet, beating Britain's Centrica Plc.
But last year, Mittal Investment Sarl (MIS) decided to exit the project possibly because of the global economic downturn.
"When we had bid for the block in Trinidad & Tobago, we had consciously decided not to take more than 51% stake. After the exit of MIS we had the option of doing the project entirely on our own but that did not fit into our scheme of things," an OVL official said.
OMEL had 65% interest in the block while Trinidad & Tobago's State-owned oil firm Petrotrin had the remaining. Under the initial agreement, OMEL was required to carry Petrotrin during the exploration phase (OMEL contributing Petrotrin's share of investment).
After the exit of MIS, OVL—the overseas investment arm of ONGC—would have had to foot the entire $304 million exploration expenditure with Petrotrin not willing to share any risk. "We tried to get an international energy firm as partner but did not succeed so we had no option but to exit the block," the OVL official said.