ONGC Videsh to invest $1 billion in offshore block held by Petrobras

Brazil's Petroleo Brasileiro SA (Petrobras) owns a 75 per cent stake in the block and the rest 25 per cent is held by OVL, it will raise its stake in the block

ONGC Videsh Ltd (OVL) will invest $1 billion in a Brazilian offshore hydrocarbon block and will raise its stake. Currently, Brazil's Petroleo Brasileiro SA (Petrobras) owns a 75 per cent stake in the block and the remaining 25 per cent is held by OVL. According to a report in Mint, the block was discovered in 2019 and is expected to start production by 2026. 

The 320 sq km block lies in the Sergie Alagos Offshore Basin. 

"Energy diversification is an important agenda before the Indian government with investments planned in Brazil," the Mint report quoted a person aware of the matter as saying. 

Recently, Bharat Petroleum Corporation Ltd (BPCL) signed an agreement with Petrobras to import crude oil. 

The focus of Indian oil companies has been on Latin America. Indian Oil Corporation (IOL) has also signed an agreement with Colombia's Ecopetrol SA to procure oil. 

OVL, Indian Oil Corp. (IOC) and Oil India Ltd are also looking to invest jointly in the Vostok project of Russia’s Rosneft. India has also been looking to invest in Novatek’s Arctic LNG-2 project as part of its energy security efforts, Mint added.

India imports 85 per cent of its oil requirements from abroad. It also imports 55 per cent of all its natural gas needs. The central government and companies have been making an effort to diversify the sources in order to get protected from future disruptions. 

"Most people and even experts have not registered that Brazil is an important player in oil. Today, we are the seventh largest producer and seventh largest exporter of oil, and we will be the fifth largest producer and exporter soon. However, India is one of the first countries to accept the idea that Brazil is a major player in oil. Since Brazil is a new player in this industry, it is important that we have as close a relationship as possible with India, which is a major consumer nation," Brazil's spokesperson was quoted as saying by Mint.