Mittal subsidiary to invest in Trinidad's energy

OMEL Energy Trinidad and Tobago, a subsidiary of ONGC Mittal Energy, plans to invest $ 500 mm in searching for oil and gas and building production facilities in the Caribbean twin-island state over the next four years.
But, even before finding a drop of hydrocarbon, the Indian company, the newest entrant into Trinidad and Tobago's energy sector, paid a $ 30 mm signature bonus to the government -- the largest by far ever paid by a company upon initialling a production sharing contract.

OMEL is the legal entity arising out of a joint venture between ONGC Videsh Limited, the overseas arm of India's national company, the Oil and Natural Gas Company of India and Mittal Investments.
Mittal currently owns an iron and steel company in Trinidad and Tobago.

New contract
OMEL and state-owned oil company Petrotrin on December 30 signed a contract with the government for the gas-prone North Coast Marine Area (NCMA) Block 2 which is located in water depths that averages 150 metres and comprises 98,669 hectares.
The Block is within a prolific dry gas province in which a productive hydrocarbon system has been established and is on trend with the Northern Venezuelan dragon gas field and a couple gas discoveries made in 2008.

Well-known gas fields
Additionally, some well-known gas fields surround the block including Hibiscus, Chaconia, Ixora and Poinsettia to the southwest and the overlapping Orchid Discovery to the East.
Over the next four years, the joint venture plans to carry out an aggressive work programme that involves the acquisition of 986 sq km of full fold 3D seismic and the drilling of at least five exploration wells to depths ranging from 9,000 to 13,500 feet.

Petrotrin's executive chairman, Malcolm Jones, said challenges will arise with respect to gas pricing, transportation and marketing, especially in light of the current international crisis.
"Fortunately, the prognosis looks good for a growing local demand for gas, based on government's stated objective of further expansion of downstream gas industries," he said.

Bids submitted
ONGC Mittal submitted their bid during government's 2006 energy round for onshore and submarine areas and after months of negotiations was finally awarded rights to NCMA 2. Part of the agreement was that state owned Petrotrin would be a 35 % partner with OMEL in NCMA 2.
Vishwanath Ravindranath, chief executive officer of OMEL, said a glimpse of the pre-bid screening studies provided to the company showed a high potential for hydrocarbon discoveries in the block.

One of many ventures
"We intend to have a long-term presence in this country and will look at this award of this block as the first step towards many more ventures in the upstream and downstream hydrocarbon industry," he said.
Ravindranath added that the company will also be looking at government's 2009 energy bid rounds that are expected in the first quarter of 2009.

Energy Minister Conrad Enill said ONGC -- which has subsidiaries operating in hydrocarbon related activities in 13 countries across four continents -- will bring its vast experiences and knowledge to Trinidad's energy sector.
"In so doing, there are potential synergies that can be realised between our state companies and be of tremendous benefit to the people of this country," Enill said of the new partnership.