ONGC Videsh, India's government-owned overseas petroleum company, increased its stake in Block BC-10, a deepwater offshore block in Campos Basin of Brazil, by 12% to 73%, the company said, blocking a move by China's Sinochem to buy a 35% stake in the block.
The Campos Basin is considered a promising hydrocarbon reserve of the future, but suffers from high costs due to the difficulty in extracting oil from the undersea region.
The operator, Shell now holds the balance ownership in the BC-10 block.
ONGC Videsh had acquired 15% interest in Block BC-10 in 2006. The other partners in the block were Shell, which was also the operator of the block with 50% interest, and Petrobras with a 35% stake.
In August 2013, Petrobras entered into an agreement with Sinochem for sale of its 35% PI in the block. This agreement was subject to pre-emption rights of the partners. Shell and ONGC Videsh exercised their pre-emption rights for acquisition of 23% stake and 12% stake respectively. On approval of the Brazilian regulatory authorities for acquisition, the transaction has been completed on 30th December, 2013. ONGC Videsh has paid a purchase consideration of USD 561 million for 12% stake in the block.
The Block BC-10 also known as Parque das Conchas is in Campos Basin of Brazil and includes 4 offshore deep-water fields - Ostra, Abalone, Argonauta and Nautilus and a few identified exploration prospects. The block is in the deep-waters of Brazil in the water depths ranging from 1500 to 1950 meters. The Project is being developed in three phases. Production from Phase I started in year 2009. The Phase II of the Project has come on stream in October 2013 with an expected peak production of about 35,000 barrels of oil equivalent per day (boepd) in 2014. The current oil production from the block is about 50,000 boepd. The Phase III is to come on stream in 2016 with expected peak production of about 28000 boepd in 2017. The production from all the phases is expected to be about 75,000 boepd in 2017.
ONGC Videsh is a wholly owned subsidiary of Oil and Natural Gas Corporation Limited (ONGC), the National Oil Company of India, and is India’s largest international oil and gas E&P Company. Presently ONGC Videsh has participation in 32 projects in 16 countries including Azerbaijan, Brazil, Colombia, Iraq, Kazakhstan, Libya, Myanmar, Russia, South Sudan, Sudan, Syria, Venezuela and Vietnam. ONGC Videsh is currently producing 160 thousand barrels of oil and oil equivalent gas per day and has total oil and gas reserves of about 433 million tonne of oil and oil equivalent gas (mmtoe) as on 31 March 2013.
ONGC is the flagship National Oil Company of India and is the highest valued and the highest profit making Government of India enterprise. In the financial year ending on 31 March 2013, ONGC Group produced 58.7 million tonne of oil and oil equivalent gas (mmtoe) which is approximately 1.2 million barrels of oil and oil equivalent gas per day. ONGC Group had a turnover of INR 165,849 Crore (USD 30.45 billion), profit after tax of INR 24,220 Crore (USD 4.44 billion) and total oil and gas reserves of 1,759 mmtoe as on 31 March 2013.
