BPCL, Videocon JV to acquire Brazil's EnCana Brasil Petroleo for $283 million

19 September 2008

A consortium of oil refiner Bharat Petroleum (BPCL) and Videocon Industries have jointly entered into agreement to buy 100-per cent of Brazil's EnCana Brasil Petroleo Limitada (EBPL) for $283 million (about Rs1,310 crore). The consortium will initially pay $165 million towards acquiring the 100 pr cent equity of the Braxillian firm and a $118 million reimbursement of all the expenses incurred by EBPl since 1 January 2007.

The acquisition agreement was signed between VB (Brasil) Petroleo Private Ltd, equally held joint venture between Videocon Industries Ltd and BPCL's wholly-owned subsidiary Bharat PetroResources Ltd and Canadian natural gas producer EnCana Corp and 749793 Alberta Ltd on 18 September 2008 for the purchase of EnCana's Brazillian subsidiary EnCana Brasil Petróleo Limitada, Brazil, on a 50:50 basis.

The transaction is for interests in EBPL's assets of 10 deep water offshore petroleum exploration blocks including Espírito Santo, Sergipe-Alagoas, Potiguar and Campos Basin concessions- the four concessions in Brazil.

EnCana is a leading North American unconventional natural gas and integrated oil sands company with an enterprise value of approximately $50 billion, trade on the Toronto and New York stock exchanges.

EnCana Brasil is a consortium of EnCana Corp and Brazilian oil majors Petrobras and Anadarco. It has non-operating interests in 10 deep and ultra-deep water exploration blocks offshore Brazil, nine of which are operated by Petrobras, the Brazilian national oil company whereas Anadarko Corporation, USA through its Brazilian subsidiary is the operator in one remaining Concession.

A further payment of $118 million will be made as reimbursement of all the expenses of EBPL since 1 January 2007 Videocon said in a statement.