OVL to have stake in Brazil oilfield | india | Hindustan Times
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OVL to have stake in Brazil oilfield

With this OVL is set to add another overseas asset to its kitty of stake in 13 properties spread across a dozen countries.

india Updated: Apr 07, 2006 12:20 IST

ONGC Videsh Ltd (OVL), the overseas arm of state-owned exploration major Oil and Natural Gas Corporation, is set to soon acquire 15 per cent equity stake worth $400 million in an oilfield in Brazil.

With this ONGC Videsh is set to add another overseas asset to its kitty of stake in 13 properties spread across a dozen countries, including Russia, Sudan and Myanmar.

ONGC Videsh's original plans to acquire ExxonMobil's 30 per cent stake in the Brazilian oilfield in Campos Basin had run into some problem with Royal Dutch/Shell, the operator of the field with a 35 per cent stake, deciding to exercise its pre-emptive rights to the stake sale.

Brazil's state-owned Petrobas, which also holds 35 per cent stake in the field, has however decided to forgo its pre-emptive rights in favour of ONGC Videsh, paving way for its entry into the South American country.

"With Petrobas having agreed to forego its rights in ONGC Videsh's favour, the process is now on for Shell to first acquire ExxonMobil's stake. In turn, Shell will be transferring 15 percent stake to ONGC Videsh in a $400 million plus transaction," official sources said.

"The deal is expected to be signed soon, possibly next week. The Campos Basin BC-10 field is a discovered oilfield," a senior ministry official said.

In December, ONGC Videsh had got the approval of the Cabinet Committee on Economic Affairs (CCEA) to invest $820 million in the Brazilian field BC-10 for acquiring 30 percent stake. But now the deal is set to be of a much lower value.

The Indian investment in Brazil is likely to see further attempt by Petrobas to enter exploration activities in India through participation in the latest round of 55 exploration blocks offered for bidding. In the earlier round (NELP-V), Petrobas had failed to make the mark, official sources said.

The Brazilian company has indicated to ONGC that it would like to join hands with it in the NELP-VI round.