Indian Oil to buy French company Maurel & Prom’s assets in Congo for $1.5 bn

Indian Oil Corporation is likely to acquire French company Maurel & Prom’s stake in oilfields in Congo for about $1.5 bn.

Maurel & Prom had announced sale of its interest in the producing fields of M’Boundi and Kouakouala and other exploration areas in Congo to Eni of Italy for $1.434 bn. Maurel & Prom had announced sale of its 48.6% interest in the M’Boundi oil field and 66 % in the Kouakouala A oilfield to Eni. Besides, it was selling 50% in Kouakouala B, C, D exploration blocks and 50% Kouilou exploration permit. But the transaction was subject to waiver of pre-emption right by partner Burren Energy of UK. The British firm has time till the end of March to exercise its pre-emption right. Indian Oil and its partner Oil India Limited are in advanced stage of discussions with Burren Energy for possible takeover of Maurel & Prom’s interest in Congo.

Burren Energy wants operatorship of the fields in Congo. By exercising its pre-emption right, it will first acquire Maurel & Prom’s interest in the fields and through a back-to-back agreement sell most of it to Indian Oil-Oil India combine. Burren Energy has 31.5% interest in M’Boundi field and 25% interest in Kouakouala. If the acquisition goes through, IOC-OIL will get 17,000 barrels of oil per day from M’Boundi field in 2007. This will increase to 28,000 barrels per day in 2010.

Read The Economic Times article.

LN Mittal to buy 49% stake in HPCL’s Bathinda refinery for Rs. 3300 crores

Indian-born British steel magnate LN Mittal will pick up a 49% stake in the Rs. 16,700 crore-greenfield refinery project at Bathinda in Punjab with an investment of around Rs. 3300 crores. The refinery is being set up by Hindustan Petroleum Corporation Limited (HPCL). This is the first foreign direct investment in the refinery sector. HPCL will sign a JV with Luxembourg-based Mittal Investments for the 9 mmtpa Guru Gobind Singh Refinery project and allied facilities at Bathinda. Mittal Investments is wholly owned by the Mittal family and is registered in Luxembourg. It holds 38% in Mittal Steel Company.

Earlier, on two occasions, HPCL failed to forge alliances with British Petroleum of the UK and Saudi Aramco of Saudi Arabia. HPCL and Mittal Investments will hold 49% equity each in the project, while the balance 2% will be held by financial institutions. It is expected that a formal agreement between the two partners will be signed during the proposed visit of Mr. Mittal on March 2. Public sector Oil India (OIL) may also join the project at a later date and may get a 10-15% stake in the project out of HPCL’s 49%. The HPCL board had cleared the JV proposal on Monday. The project is expected to be commissioned by 2010.

Read The Economic Times article.