Shirish Nadkarni
OGJ Correspondent
MUMBAI, Feb. 19 -- Nonresident Indian steel tycoon Lakshmi Mittal and Indian refiner Essar Oil are among four companies making preparations to buy a 50% equity stake in Prize Petroleum, a subsidiary of state-run Hindustan Petroleum Corp. Ltd.
Prize operates three small fields in western India and is considering a rights issue to fund its expansion.
"Mittal Energy, Essar Oil, Larsen & Toubro, and Jaiprakash Associates are all doing due diligence for buying up the 50% stake of financial institutions in Prize Petroleum," said Hindustan Petroleum Chairman Arun Balakrishnan.
ICICI Bank, India's second largest lending institution, owns 45% of Prize Petroleum's equity, while mortgage firm Housing Development Finance Corp. holds the remaining 5%. Balakrishnan said his company was not interested in investing further in the explorer.
"The sale of all or part of the two lenders' holding should be completed within 2 months, but it will be up to ICICI Bank to determine exactly when," Balakrishnan said.
Mittal's group plans to bid for oil and gas assets being auctioned by the Indian government. The billionaire magnate has been trying to step up his family's diversification away from the steel industry.
Singapore-based investment arm Mittal Energy Investments (MEI) is an equal partner with Hindustan Petroleum in the building of a 180,000 b/d refinery in the Punjab. British Petroleum had earlier shunned the refinery.
MEI recently entered into a memorandum of understanding with Total, Hindustan Petroleum, Oil India, and gas transmission firm GAIL India for a new refinery and petrochemical unit on India's east coast at Visakhapatnam in Andhra Pradesh.
Another Mittal group firm, Mittal Investments Sarl, has teamed with the country's top energy firm Oil & Natural Gas Corp. to form ONGC Mittal Energy, which is looking at buying energy assets outside India.
