Indian oil firms look at sourcing crude from Brazil

ONGC Videsh may have a role to play, following its engagements in Latin America.

Indian oil companies are evaluating the possibility of procuring crude from Brazil following the recent discovery of massive oil fields in the Latin American country.

Official sources said the discovery was recent and it might take a year or two to work out the logistics. Crude oil prices are volatile and it is a prized commodity; any new discovery is an advantage. More so with a discovery of 'sweet' or light crude oil as this one, precious since it contains less sulphur and has less refining cost. It is why oil companies have been trying to more of African Brent crude, with similar properties, and not heavy crude from West Asia/North Africa. Sources said one could tie up with companies which help in procuring African Brent to route shipments from Brazil as well.

Besides, Oil and Natural Gas Corporation and its subsidiary, ONGC Videsh, may have a greater role to play due to their existing arrangements in Latin America, another company source said. China Petroleum Corporation, the joinnt venture partner of ONGC in acquisition of a 30 per cent stake in the Syrian Al- Furrat Petroleum Company, now proposes to invest 30 per cent in Portuguese oil company Galp Energia SGPS SA's Brazilian unit. Galp's main assets in Brazil include four deep water offshore blocks in the Santos basin, the site of several recently discovered major oil fields. The synergy could be exploited, he added. Also, ONGC Videsh has already acquired assets in Brazil.

Brazil's Petrobras recently discovered the largest crude oil field since the Mexican Cantarell Field in 1976. Reportedly, the new Sugar Loaf Field discovery is five times larger than existing Brazilian fields. Reports said these reserves make Brazil the eighth largest oil and gas reserve.

Many companies propose to take advantage of pricing by buying crude from Syria. where import sanctions by the European Union and America has led to supply overhang. Reportedly, ONGC Videsh is looking to ship crude oil from Syria to India. OVL's majority owned ONGC Nile Ganga BV (ONGBV) holds 16.66 per cent stake in four production sharing contracts, comprising 36 producing onland fields operated by Syria's Al Furrat, which had to scale down output due to the EU sanctions. ONGBV is a joint venture of India's Oil and Natural Gas Corp and China National Petroleum Corp.