ONGC, Shell acquire Petrobras' stake in Brazilian offshore oil block for $1.64 bn
31 Dec 2013
ONGC Videsh Ltd (OVL), the overseas arm of state-run explorer Oil and Natural Gas Corp (ONGC) and Royal Dutch Shell yesterday acquired the remaining 35 per cent of a Brazilian offshore oil block, not already owned by them, for $1.64 billion, from Petroleo Brasileiro SA (Petrobras).
Under the deal, OVL will get an additional 12 per cent in the deep offshore Block BC-10 in the Campos Basin in Brazil, taking its stake to 27 per cent, while Shell will get an additional 23 per cent, taking its operatorship stake to 73 per cent.
OVL had earlier acquired 15 per cent participating interest in Block BC-10 in 2006.
Brazilian state-controlled Petrobras had earlier agreed to sell its 35-per cent stake in the block to China`s Sinochem Group for $1.54 billion, but the deal was subject to pre-emption rights of ONGC and Shell.
Shell and OVL served a pre-emption notice on 17 September to jointly acquire the 35-per cent stake, and accordingly, OVL, through its affiliates signed sale and purchase agreements with Petrobras on 11 October 2013 for acquiring the 12 per cent stake for $529.03 million.
For Petrobras, the sale is part of its plan to sell non-core assets in order to fund its $237-billion, five-year investment plan.
Block BC-10 located around 74 miles off the southern coast of Espirito Santo state with a water depth of nearly 1.2 miles, contains the Ostra, Abalone, Nautilus, Argonauta B-West, Argonauta O-North, Argonauta O-South and Massa fields.
Phase 1 production from Abalone, Ostra and Argonauta B-West fields started in 2009 from nine wells and has produced more than 70 million barrels since coming on-stream in 2009.
Shell approved a third phase of the project in July which could add as much as 28,000 barrels a day of oil.
ONGC is also planning to exercise its pre-emption rights in Venezuela's multibillion-dollar Carabobo-I project, where the Malaysian state-owned oil company Petronas is seeking to sell its 11 per cent stake. ONGC's overseas arm OVL holds 11 per cent stake in Carabobo-I project.
Other stakeholders in the Carabobo project are Venezuela's state oil company PDVSA with a 60 per cent stake, Spain's Repsol and OVL, each with 11 per cent, and Oil India Ltd and Indian Oil Corp each with 3.5 per cent.
