OVL ups stake in Brazilian block to 27%

Total stake in the deepwater offshore block in Campos Basin rises to 27%

ONGC Videsh, through its affiliates has acquired an additional 12% Participating Interest (PI) in Block BC-10, a deepwater offshore block in Campos Basin, Brazil taking its total PI in the block to 27%.

The operator, Shell now holds the balance 73% PI in the block. The overseas arm of ONGC had in 2006 acquired 15 % PI in the same block. The other partners in the block were Shell, Operator with 50% PI and Petrobras with 35% PI. 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% PI and 12% PI, respectively. On approval of the Brazilian regulatory authorities for acquisition, the transaction has been completed on 30th December, 2013, said an ONGC press release.

ONGC Videsh has paid a purchase consideration of $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.