ONGC, Petrobras in block-swap deal as India, Brazil move to boost economic ties

04 June 2007

Mumbai: PSU oil explorer Oil and Natural Gas Corporation has signed a preliminary agreement with Brazil''s Petrobras that would give the two state-controlled firms stakes in each other''s exploration blocks.

India and Brazil also signed several other agreements to boost economic cooperation.

The agreements for cooperation in oil exploration, education, space, audiovisual co-production and assistance in customs matters were signed in the presence of prime minister Manmohan Singh and visiting Brazilian president Luiz Inacio Lula da Silva.

While Petrobras had earlier allowed ONGC to acquire a stake in an exploration block off Brazil''s east coast, the new deal will allow the Brazilian oil major explore in oil blocks in India, ONGC said in a statement.

Under the new deal ONGC will get 25-30 per cent stake in three exploration blocks in Barrierinhas, Sergipe-Alagoas, and Santos basins off Brazil''s east coast, Petrobras Europe Ltd.''s new venture manager Demarco Epifanio was quoted as saying.

In return, Petrbras will get a 15-40 per cent stake in ONGC''s three deep-water blocks in Mahanadi, Krishna-Godavari and Cauvery basins off India''s east coast, Epifanio said, adding, "At a later date Petrobras may increase its stake in blocks of ONGC depending on the success and need."