Kazakhstan Offers 25% Stake to ONGC-Mittal JV in Oil Block

NEW DELHI Oct 13, 2006 (Dow Jones Newswires)

Kazakhstan has offered Indian joint venture company ONGC Mittal Energy Ltd. a 25% stake in an offshore exploration block in the Caspian Sea, Kazakhstan's Minister of Energy and Mineral Resources said Friday.

"It may be increased later to not more than 50% when the block starts producing oil," Baktykozha Izmukhambetov told reporters after a meeting with Indian Petroleum Minister Murli Deora.

ONGC Mittal Energy Ltd. is a partnership between ONGC Videsh Ltd., a wholly owned upstream unit of India's state-run Oil & Natural Gas Corp. (500312.BY), and Indian steel producer Mittal Steel Co. (MT).

The Satpaev block, for which the stake is being offered, is estimated to hold reserves of 1.6 billion barrels of oil, said ONGC Videsh's Managing Director, R.S. Butola.

It is currently owned by Kazakh state-run oil and gas company KazMunaiGaz.

Butola, however, said his company is negotiating with the Kazakh ministry for a 50% stake for ONGC Mittal so that the terms for the share of investment and production would be clear from the start.

Izmukhambetov is in New Delhi for two days to explore areas for bilateral energy cooperation.

Copyright (c) 2006 Dow Jones & Company, Inc.

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