Videocon zooms 9% after announcing fresh oil discovery in Brazil

Videocon announces discovery of petroleum by consortium that includes Petrobras, BPCL and Videocon.

Shares of Videocon Industries zoomed nearly 12% to Rs 177 on the BSE after it  announced on Tuesday petroleum discovery in Brazil.  

“The accumulation is part of the Sergipe-Alagoas Basin ultra-deep water exploratory project, as provided for in the 2014-18 business and management plan.The well 3-SES-186 is currently under further drilling to the target depth of 6060 meters, at water depth of 2467 metres,” Videocon said in a statement issued to BSE on Tuesday. The stock opened at Rs 160 and closed 9% up at Rs 172.10 on the BSE.

This is largest discovery of petroleum by the consortium this year. The consortium includes Brazilian firm, Petrobras - which owns 60% stake,  BPCL and Videocon which own 20% stake each. The consortium partners will continue implementation of the Discovery Assessment Plan as approved by the Brazilian regulatory authority, Agencia Nacional Do Petroleo, Gas Natural e Biocombustiveis (ANP).

The consortium will carry on operations in the area to further confirm the extent of the hydrocarbons in place and the characteristics of the reservoir conditions encountered.

When contacted, V N Dhoot Chairman of Videocon Group, declined to comment on the size of the discovery but said “it’s naturally huge” and the discovery of new hydrocarbon accumulations at multiple plays will further add to the hydrocarbon resources already indicated in the said blocks. "This is truly a matter of great pride where two Indian companies have successfully ventured so beautifully in such a large frontier of oil and gas in Brazil. The large scale and volume and light oil discovery, will enable one of the lowest cost producing giant oil fields in the world,” he said. The Well 3-SES-186 is currently under further drilling to the target depth of 6,060 meters, at water depth of 2,467 meters off Brazilian coast.

Experts say the discovery, centered on the SEAL-11 offshore exploration block, holds more than one billion barrels of oil and the region will soon become Brazil's biggest new oil frontier. It is expected that along with the other Barra and Cumbe discoveries made by the consortium in the 4 Sergipe Basin blocks they own, reserves are touching a massive two billion barrels, making it the largest hydrocarbon discovery of the year.