According to ONGC officials,Steel tycoon Lakshmi N Mittal’s acquisition of 49% stake in Hindustan Petroleum’s $3 billion Bhatinda refinery is a violation of his pact with Oil and Natural Gas Corp (ONGC) to pursue hydrocarbon opportunities exclusively with the flagship Indian firm.

An ONGC official, who did not want to be named said that

“The July 24, 2005 agreement had earmarked 27 countries for exclusive pursuit of hydrocarbon opportunities by OMEL. For the rest of the world, it clearly stated that Mittal shall offer ONGC Videsh a partnership in any venture or business opportunity it wishes to undertake in the hydrocarbon sphere”

It should be noted that OMEL is a joint venture between ONGC Videsh Ltd (OVL), a wholly-owned subsidiary of ONGC and Mittal Investment Sarl, the controlling shareholder of Mittal Steel Company. OMEL, incorporated in the Republic of Cyprus and has interest in overseas oil and gas business.

According to the Clause 2.4 of the 2005 agreement reads: ”

In the event Mittal or any of it affiliates is desirous of undertaking any venture or business opportunity in the hydrocarbons business in areas other than the Territories (27 countries), Mittal shall invite OVL, to the extent permissible and in the manner and with such information about such venture or business opportunity as it deems fit, to participate in such venture or business opportunity together with Mittal.

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But he also said that there was no such restriction for ONGC, he said, adding Nigeria and Kazakhstan fall under the 27 exclusive countries marked for OMEL.