Essar baggs offshore oil block in Nigeria

India’s hunt for oil equity got a boost with Essar Energy Holdings Ltd. bagging one shallow offshore block in Nigeria through an open bidding process. Block 226 is spread over 1200 square km of acreage and has estimated oil reserves of more than 80 million barrels, industry sources said.

However, steel tycoon L.N. Mittal's plans to acquire Nigeria's biggest oil refinery failed to materialise. ONGC-Mittal Energy Ltd., a joint venture between public sector Oil and Natural Gas Corporation and the steel tycoon, had decided to keep away from bidding for the oil blocks on offer in Nigeria.

Mittal offered less than the $ 561-million bid by a consortium of three Nigerian indigenous companies for acquiring 51 per cent of government stake in Port Harcourt refinery, industry sources said. The winning Blue Star consortium comprises Zenon Oil, Dangote Oil and Gas and Transnational Corp, which belong to close associates of outgoing President Olusegun Obasanjo.

Blue Star emerged winner of the refinery in an open bid conducted yesterday by the Nigerian privatisation agency -- Bureau of Public Enterprises in Abuja. Two other bidders, local fuel marketer Oando and the Sahara/Refinee PetroPlus, were disqualified for not providing bank drafts to cover 50 per cent of their bid amount, sources said.

Nigeria had offered 45 exploration blocks in its latest licensing round, to which no Indian company except Essar responded. Of the total 45 blocks, 11 were in deep water offshore, 10 shallow water on the continental shelf, 13 onshore in the Niger Delta, and 11 in inland basins.

The winning of a block in Nigeria is a significant development in Essar’s efforts to have a global presence. The company currently has stakes in two blocks in Myanmar, one each in offshore and onshore, apart from three blocks in Madagascar. Domestically, Essar has a stake in Ratna R-series and Mehsana blocks.

When contacted, an Essar spokesman said, “ We had submitted a bid for blocks in Nigeria and are awaiting the outcome.”

Email author: djoshi@hindustantimes.com