» Business » ONGC-Teri in final lap of $3 bn deal race

ONGC-Teri in final lap of $3 bn deal race

By Maulik Pathak in Ahmedabad
March 19, 2009 13:36 IST
Get Rediff News in your Inbox:

ONGC-Teri Biotech Ltd, a joint venture between Oil and Natural Gas Corporation LtdĀ and The Energy and Resources Institute, is competing to get a contract for cleaning the huge oil spill left over from the 1991 Gulf war in Kuwait.The contract has been floated by Kuwait Oil Company and backed by the United Nations.

ONGC has qualified for final bidding of the first phase of the bioremediation project, worth $3 billion. The total project, to be funded by the World Bank, was likely to cost up to $40 billion, said sources.

Talking to Business Standard, OTBL chairman AK Hazarika said: "We have been the first company to successfully demonstrate in Kuwait how our Oilzapper technology (which uses microbes) can clean oil spills in their contaminated land, spread over about 200 sq km. Our technology is acceptable to them and we have been asked to submit bids for the $3-billion project."

This project was first floated in 2006 and is aimed at cleaning the huge oil spills created during the war, which was fought after Iraq occupied Kuwait. OTBL is hopeful of bagging this project.

In OTBL, Teri has 47 per cent equity, while ONGC has 49 per cent. The remaining 2 per cent is with financial institutions.

"If successful, this will open up opportunities for many other downstream and upstream businesses in Kuwait," said Hazarika, who is also director (onshore) for ONGC.

The second phase of the project, the tenders for which will be floated soon, is worth about $2.8 billion, according to informed sources.

OTBL had first used the microbial product, Oilzapper, in a water body at Mehsana in Gujarat to eliminate an oil spill and manage the sludge created from the first oil well in the region. The water is so clean now that the area has become a haven for birds and fish, according to a company official.

"This technology, wherein microbes that feed on oil are created, has caught the attention of many countries like Oman and Syria, who have approached us in the recent past," he added.

Get Rediff News in your Inbox:
Maulik Pathak in Ahmedabad
Source: source

Moneywiz Live!