April 28, 2006
New Delhi: ONGC Videsh Ltd, the overseas arm of state-owned oil and Natural Gas Corp (ONGC), will buy a 15 per cent stake in Brazilian oil field from Royal Dutch/Shell for US$ 170 million.
OVL will take the stake in block bc-10 in Brazil, company sources said.
OVL had originally bought US energy giant Exxon-Mobil's 30per cent stake in bc-10 for 330 million dollars. It had committed another 490 million dollars as its share of development cost.
However, Shell as the operator of the block had the first right of refusal on any stake sale in the venture by partners. It exercised its pre-emption right and now OVL is buying half of that stake.
Shell would remain operator of the field with a 50 per cent stake while Petrobras will own the other 35 per cent, sources said.
Shell operates the Bijipura and Salema fields off the coast of Brazil where it has an interest in 14 exploration blocks. Bc-10 field has production potential of 100,000 barrels of oil a day and is located about 120 kilometers (75 miles) South-East of the city of Vitoria, in the Brazilian state of Espirito Santo, in water as much as 200 meters (660 feet) deep.
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