Saturday, July 23 2005 19:07 Hrs (IST) - World Time -

New Delhi: India's largest oil producer, Oil and Natural Gas Corporation (ONGC) and world's largest steel maker Mittal Group today (July 23, 2005) signed an agreement to form two joint venture companies for exploration of oil and gas assets and related businesses abroad.

ONGC Videsh Ltd (OVL), the overseas arm of ONGC, and Mittal Investment SARL signed a MoU (Memorandum of Understanding), which provides for establishing a joint venture called ONGC-Mittal Energy Ltd in which 98 per cent equity will be held in proportion of 51 per cent with OVL and 49 per cent with Mittal Investment. Financial institutions will hold the remaining 2 per cent equity.

The state-run oil giant and Mittal Investment SARL signed the second MoU for cooperation in trading and shipping of oil and gas (including Liquified Natural Gas), sourced through ONGC-Mittal Energy Ltd. The second MoU provides for setting up a joint venture named ONGC-Mittal Energy Services Ltd with shareholding pattern similar as in the first case.

The two groups will cooperate in exploration, development, production, evacuation and related consequential processing of hydrocarbons whether in the form of oil, condensates or gas (including LNG) in various countries.

ONGC Chairman Subir Raha said the deal is to secure energy security of India through global resources.

Mittal Steel chairman L N Mittal said, "Our business is in oil dominating nations and the nations have been requesting us to look at oil business. Jointly we can play a very important role in securing energy security for the country."

Raha said the focus countries would be where Mittal Group already has presence and the attempt would be to leverage their strengths in those countries.