ONGC Videsh picks up 15 per cent equity in oil block in Brazil

New Delhi, Apr 27 (UNI) ONGC Videsh Ltd today said it has acquired 15 per cent equity in BC-10 Holdings , a 290 square Km off-shore oil block in Brazil for 170 million dollars.

BC-10 holding will have Shell as the operating partner and Petrobas with 35 per cent equity, OVL Managing Director R S Butola said here at a press conference. The area is located approximately 120 Km southeast of the city of Vitoria, in water depths ranging from 1500 to 200 meters, Before the entry of ONGC, the share holding pattern in BC-10 was Exxon with 30 per cent, Shell with 35 per cent and Petrobras with 35 per cent.

The oil block in Brazil where the fossil fuel would be struck at a depth of 11,00 meters and will produce 100,000 Barrels Per Day (BPD) by 2009 will be the first investment of ONGC in Latin America whose oil reserves are estimated at 26 billion barrels and next only to world leader Saudi Arabia.

Shell and Petrobras have agreed, through Petrobras waiving its pre-emption rights, to 15 per cent, half of Shell's additional stake acquired through this premption.

The Transaction increases Shell's equity interest while bringing ONGC into the joint venture partnership.

CMD, ONGC Subir Raha said in the coming months, Shell, Petrobras and ONGC will continue to analyse options for the development of BC-10. The project has entered the front-end engineering design phase and a high-level development concept has been selected.

''The deepwater offshore Brazil is an important element of our global growth strategy. We belive that an increased interest in BC-10 is an attractive opportunity. The nature of this deal emphaises the strength of our relationships with Petrobras and our growing relationships with ONGC,'' Shell Exploration and Production Vice-President John Haney said.

Shell is the leading international player in offshore Brazil with production from the Shell-operated Bijipura Salema fields and interests in 14 exploration blocks.

BC-10 was declared commercial in December 2005. The declaration of commerciality occured after a substantial exploration and appraisal programme involving 13 wells and significant engineering and technological studies.

A total of six discoveries were made in the block, which resulted in four development areas: Ostra, Aronauta, Abalone and Nautilius.

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