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New Delhi: India has trumped China in acquiring a stake in a deep offshore block in Brazil, with state-owned ONGC Videsh Ltd (OVL) jointly acquiring Brazils Petróleo Brasileiro SAs (Petrobras) 35% stake in the BC-10 block in the Campos Basin for around $1.54 billion (around Rs.9,440 crore) along with Royal Dutch Shell Plc.
ONGC Videsh, through its affiliates, signed definitive agreements to acquire a 12% participating interest in Block BC-10, Campos Basin, Deep Offshore Brazil, as part of the sale of 35% share made by Petrobras, Oil and Natural Gas Corp. Ltd (ONGC) said in a statement on Monday.
Prior to the transaction, the stakes of Shell, Petrobras and OVL were 50%, 35% and 15%, respectively. The Brazilian firm entered an agreement with Chinas Sinochem in August for offloading its 35% stake for $1.54 billion.
This led to Shell and OVL exercising their pre-emptive rights to secure the stake for which OVLs share would be $529.03 million for its 12% stake. With this acquisition, OVL will have 27% stake in the Parque das Conchas block, the licence for which ends in December 2032.
This comes in the backdrop of Indian and Chinese firms involved in a race for securing resources overseas to fuel the growing demand of their respective economies. An earlier attempt by OVL to buy ConocoPhillips 8.4% stake in Kazakhstans Kashagan offshore oil field was scuttled by China, with the Kazakhstan government exercising its rights to buy the shares on offer. It was later sold off to China.
The acquisition of additional PI (participating interest) in the block is subject to approval of the Brazilian antitrust and regulatory authorities, the statement said.
OVL has been ramping up its overseas portfolio. The development in Brazil comes in the backdrop of recent stake acquisitions in Mozambiques Rovuma 1 offshore block, said to be the largest gas discovery off Africas east coast, with estimated recoverable reserves of 35-65 trillion cu. ft (tcf).
Overall, OVL has a portfolio of 32 assets across 16 countries. It invested $16.75 billion in acquiring these assets. The need for diversification of supplies is critical for India as it imports more than 80% of its energy requirements. India, the worlds fourth largest energy-consuming nation, imports 80% of its crude oil and 25% of its natural gas requirements. It trails behind the US, China and Russia, accounting for 4.4% of the global energy consumption.
Indias energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) now to around 1,500 mtoe, according to the oil ministrys estimates.
In a separate development, OVL won two onshore blocks of the 18 that were bid out by the Myanmar government for exploration. These blocks are B2 (Zebyutaung-Nandaw) and EP-3 (Thegon-Shwegu).
Block B2, having an area of 16,995 sq. km, is located in Northern Myanmar, bordering the state of Manipur in India, and Block EP-3, having an area of 1,650 sq. km, is located in Central Myanmar, ONGC said in the statement.
Mint reported about OVLs successful bid on Saturday. OVL has a presence in resource-rich Myanmar with interest in five blocks and has invested $565 million in the country. Myanmar had received 75 expressions of interest for these 18 blocks and shortlisted 59 companies for final bids. A total of 31 foreign companies are working in Myanmar along with state-owned Myanmar Oil and Gas Enterprise.
The acquisitions of producing and exploratory assets reflect the success of the strategy adopted by the company to quickly add reserves/production through a balanced portfolio approach, OVL chairman Sudhir Vasudeva said in the statement.
While OVL hopes to acquire 20 million tonnes per annum (mtpa) of capacity in overseas assets by 2020, Indias efforts at energy security have been a mixed bag in the backdrop of faltering domestic production.
OVL is currently producing 160 thousand barrels of oil and oil equivalent gas per day and has total oil and gas reserves of about 433 mtoe as on 31 March 2013, according to the statement.
India trumps China for Brazil offshore block - Livemint
ONGC Videsh, through its affiliates, signed definitive agreements to acquire a 12% participating interest in Block BC-10, Campos Basin, Deep Offshore Brazil, as part of the sale of 35% share made by Petrobras, Oil and Natural Gas Corp. Ltd (ONGC) said in a statement on Monday.
Prior to the transaction, the stakes of Shell, Petrobras and OVL were 50%, 35% and 15%, respectively. The Brazilian firm entered an agreement with Chinas Sinochem in August for offloading its 35% stake for $1.54 billion.
This led to Shell and OVL exercising their pre-emptive rights to secure the stake for which OVLs share would be $529.03 million for its 12% stake. With this acquisition, OVL will have 27% stake in the Parque das Conchas block, the licence for which ends in December 2032.
This comes in the backdrop of Indian and Chinese firms involved in a race for securing resources overseas to fuel the growing demand of their respective economies. An earlier attempt by OVL to buy ConocoPhillips 8.4% stake in Kazakhstans Kashagan offshore oil field was scuttled by China, with the Kazakhstan government exercising its rights to buy the shares on offer. It was later sold off to China.
The acquisition of additional PI (participating interest) in the block is subject to approval of the Brazilian antitrust and regulatory authorities, the statement said.
OVL has been ramping up its overseas portfolio. The development in Brazil comes in the backdrop of recent stake acquisitions in Mozambiques Rovuma 1 offshore block, said to be the largest gas discovery off Africas east coast, with estimated recoverable reserves of 35-65 trillion cu. ft (tcf).
Overall, OVL has a portfolio of 32 assets across 16 countries. It invested $16.75 billion in acquiring these assets. The need for diversification of supplies is critical for India as it imports more than 80% of its energy requirements. India, the worlds fourth largest energy-consuming nation, imports 80% of its crude oil and 25% of its natural gas requirements. It trails behind the US, China and Russia, accounting for 4.4% of the global energy consumption.
Indias energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) now to around 1,500 mtoe, according to the oil ministrys estimates.
In a separate development, OVL won two onshore blocks of the 18 that were bid out by the Myanmar government for exploration. These blocks are B2 (Zebyutaung-Nandaw) and EP-3 (Thegon-Shwegu).
Block B2, having an area of 16,995 sq. km, is located in Northern Myanmar, bordering the state of Manipur in India, and Block EP-3, having an area of 1,650 sq. km, is located in Central Myanmar, ONGC said in the statement.
Mint reported about OVLs successful bid on Saturday. OVL has a presence in resource-rich Myanmar with interest in five blocks and has invested $565 million in the country. Myanmar had received 75 expressions of interest for these 18 blocks and shortlisted 59 companies for final bids. A total of 31 foreign companies are working in Myanmar along with state-owned Myanmar Oil and Gas Enterprise.
The acquisitions of producing and exploratory assets reflect the success of the strategy adopted by the company to quickly add reserves/production through a balanced portfolio approach, OVL chairman Sudhir Vasudeva said in the statement.
While OVL hopes to acquire 20 million tonnes per annum (mtpa) of capacity in overseas assets by 2020, Indias efforts at energy security have been a mixed bag in the backdrop of faltering domestic production.
OVL is currently producing 160 thousand barrels of oil and oil equivalent gas per day and has total oil and gas reserves of about 433 mtoe as on 31 March 2013, according to the statement.
India trumps China for Brazil offshore block - Livemint
