ONGC Mittal combine wins oil block in Nigeria

New Delhi, Oct 6 (UNI) ONGC-Mittal, the joint venture company, has won a oil block in Nigeria after offering 100 million dollars for Nigerian Oil Prospecting Licence (OPL) 246 after a court ruling opened it for a bidding contest.

The Indian firm out-bid INC Natural Resources and BG-Sahara at an auction on Wednesday shortly after the former licensee, local oil company South Atlantic Petroleum, lost a legal challenge against a government decision to revoke the licence.

The JV company bid 100 million dollars for Nigeria's OPL-246 after the licence of South Atlantic Petroleum (Sapetro) for the block was revoked, industry sources said.

The oil block is the relinquished area of the billion-barrel Akpo oilfield of Sapetro. It is part-owned by Theophilus Danjuma, former defence minister of President Olusegun Obasanjo.

ONGC had, in January, lost out on acquiring Sapetro's 45 per cent stake in Akpo to China's CNOOC after the Indian government disallowed the state-owned firm from proceeding on the transaction where it was the highest bidder.

The JV company has to pay the 100 million dollars this week as signature bonus for OPL-246 , failing which it would lose the block to INC, which was designated the reserved bidder.

Oil companies in Africa's top producer routinely relinquish half of their exploration licences when they make a discovery.

They convert to a production licence covering a smaller area and free up unused acreage for others to do more exploration.

UNI/RT SRS VV1833