ONGC to buy 12% in Brazil oil field for $529 million

The other partners in the Brazilian block were Shell,operator with 50 per cent participating interest.

Oil and Natural Gas Corp (ONGC) has agreed to buy an additional 12 per cent stake in a Brazilian oil block from Brazils Petrobras for $529 million.

Petrobras had earlier agreed to sell its 35 per cent stake in the block to Chinas Sinochem Group for $1.54 billion,but the deal was subject to pre-emption rights of ONGC and Royal Dutch Shell.

The other partners in the Brazilian block were Shell,operator with 50 per cent participating interest (PI) and Petrobras with 35 per cent interest. In August 2013,Petrobras entered into a sales transaction with Sinochem for disposal of their 35 per cent PI in BC-10 for $1.543 billion. This agreement was subject to pre-emption rights of the partners Shell and OVL.

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A pre-emption notice was served on September 17,2013,by Shell and OVL to jointly acquire 35 per cent,in which 12 per cent PI corresponds to OVL. As a follow up of the pre-emption notice,ONGC Videsh through its affiliates has signed sale and purchase agreements with Petrobras for acquisition of 12 per cent PI in the block,for a consideration $529.03 million, ONGC said.

On closing,participating interest of OVL would increase to 27 per cent. The acquisition of additional PI in the block is subject to approval of the Brazilian antitrust and regulatory authorities.