Petrobras, OVL swap blocks in Brazil, India | business | Hindustan Times
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Petrobras, OVL swap blocks in Brazil, India

The leading oil giants ONGC and Petrobras swap interests in offshore blocks in India and Brazil, reports Deepak Joshi.

business Updated: Jun 04, 2007 21:36 IST
Deepak Joshi

Leading oil giants of India and Brazil, Oil and Natural Gas Corporation Ltd (ONGC) and Petroleo Brasileiro SA (Petrobras) on Monday announced that they had reached an agreement on swapping interests in offshore blocks in India and Brazil.

This announcement marks an increased presence of ONGC Videsh Limited (OVL) in Brazil and the entry of Petrobras into India. There was, however, no mention of the blocks ONGC was offering Petrobras.

The agreement was signed by ONGC Chairman RS Sharma, OVL Chairman RS Butola and the president of the Petrobras board of directors Jose Sergio Gabrielli De Azevedo in the presence of Prime Minister Manmohan Singh and the visiting Brasilian President Luiz Inácio Lula da Silva.

Speaking on the development, De Azevedo said, “India was always a strategic country for us. We are extremely pleased at the development. The nature of this deal emphasises the strength of our relationship with ONGC and our belief in the India story.”

Butola, a signatory to the agreement, said, “Brazil is an important element of our global growth strategy. We believe that an increased interest in the area is attractive and re-confirms our commitment to growth in Brazil.”

Earlier, Petrobras had accommodated OVL by waiving its right of pre-emption in an offshore Brazilian block and had transferred a 15 per cent interest in the block to OVL. Thereafter, the companies had entered into an agreement to jointly participate in exploration in Brazil, India and third countries. Monday’s agreement is the first step towards this strategic partnership.

Sharma said, “This agreement is the culmination of an deal that we had signed with Petrobras in September 2006 in Brasilia, which has been very fruitful. We are extremely pleased to join hands with Petrobras as it broadens our portfolio in Latin America.

"We look forward to partnering Petrobras, one of the most renowned companies in deepwater operations. We strongly believe that the expertise of Petrobras in deepwater exploration will be utilised in the development of our offshore blocks in India.”