ONGC Videsh completes acquisition of 12% stake in Brazil oil field
New Delhi: ONGC Videsh Ltd, the overseas arm of state-owned Oil & Natural Gas Corp (ONGC), has completed acquisition of an additional 12 percent stake in a Brazilian oilfield for USD 561 million after blocking a Chinese entry.
The flagship Indian firm had along with Royal Dutch Shell exercised a pre-emption right to block China's Sinochem Group from buying their partner Brazilian national oil firm Petrobras' 35 percent interest in the BC-10 oilfield.
OVL and Shell bought the 35 percent interest of Petroleo Brasileiro SA's share for USD 1.636 billion. This stake was split between OVL and Shell - the Indian firm picked up 12 percent while the remaining 13 percent went to Shell.
Shell increased its stake to 73 percent from 50 percent, while OVL's stake climbed to 27 percent from 15 percent in the Parque das Conchas project, also known as BC-10, OVL said in a statement.
The heavy-oil BC-10 block, about 110 kilometres off southeast Brazil, started production in 2009 and is currently producing 50,000 barrels of oil equivalent a day. Shell is the operator of the project.
"OVL had acquired 15 percent interest in Block BC-10 in 2006. The other partners in the block were Shell with 50 percent interest and Petrobras with 35 percent.
"In August 2013, Petrobras entered into an agreement with Sinochem for sale of its 35 percent interest in the block for USD 1.543 billion. This agreement was subject to pre-emption rights of the partners. Shell and ONGC Videsh exercised their pre-emption rights for acquisition of 23 percent and 12 percent interest, respectively," the statement said.
OVL said the transaction has received approval of the Brazilian regulatory authorities and the acquisition was completed on December 30.
Block BC-10, also known as Parque das Conchas, is in the Campos Basin of Brazil and includes four offshore deep-water fields - Ostra, Abalone, Argonauta and Nautilus - and a few identified exploration prospects.
The water depth in the block ranges from 1,500 to 1,950 metres and it is located about 120 km from Vitoria town. The licence for the fields expires in December 2032.