L N Mittal doubles his stake in Ophir Energy

Steel magnet Lakshmi N Mittal has paid over $110 million to double his stake in Africa-focused Ophir Energy Plc to 21.2 per cent even as he exited the oil and gas business in the Central Asian nation Kazakhstan.

"We would like to confirm that we recently doubled our investment in this (Ophir Energy) company," said Sudhir Maheshwari, Managing Director of Mittal Investment Sarl, the holding company of Mittal family interest.

He, however, refused to divulge financial details saying both Mittal Investment and Ophir were private companies.

Industry sources said Mittal Investment had in May 2008 agreed to buy 47 million shares in Ophir Energy at 250 pence a share in two tranches.

In the first tranche it bought 21.1 million shares for $105.3 million in May 2008 and recently it subscribed to the second trance of 26,421,790 new shares for about $113 million to double its stake to 21.2 per cent.

Established in 2004, Ophir is an independent oil and gas exploration company with a diversified exploration portfolio encompasing 16 projects in 8 different African jurisdictions.

With this, Mittal Investment has become the largest shareholder in Ophir Energy, overtaking its Mvelaphanda Holdings Pty Ltd, the South African industrial and resources conglomerate founded by Ophir's Non-Executive Chairman Tokyo Sexwale. Mvelaphanda now has 17.9 per cent.

Sources said Mittal has appointed Harak Bhantia and Rajan Tandon on the board of Ophir which has assets in Senegal (1 block), Congo Brazzaville (1 block), Equatorial Guinea (1 block), Gabon (4 block), Nigeria - Sao Tome (1 block), Saharawi Arab Democratic Republic (4 blocks), Somaliland (1 block) and Tanzania (3 blocks).

Maheshwari said Mittal Investment has pulled out of a project to develop an oil field in Kazakhstan in partnership with Oil and Natural Gas Corp (ONGC).

"Mittal Investments has decided that it does not wish to pursue the investment opportunity in Satpaev. This will now be developed by ONGC Videsh alone."

Two years ago, Mittal Investment used Kazakh government to muscle its way into the Satpayev oilfield in the Caspian Sea where ONGC Videsh, the overseas arm of the state-run firm, was shortlisted for a stake. However, on the eve of signing an agreement for the field, it decided to pullout.

Mittal, which had dumped OVL in April 2007 to acquire 50 per cent stake in Caspian Investments Resources (CIR) from Russian oil firm Lukoil for $980 million, is now looking at selling its interest in the firm.

The stake was first offered to OVL which has declined, Maheshwari said without elaborating.

Sources said Mittal is now looking for buyers including those in China to sell its stake in CIR. LUKOIL which holds the remaining stake in CIR, may also be a potential buyer.