OVL buys off 12 percent stake in Brazil oilfield

The foreign arm of state-run explorer Oil and Natural Gas Commission, ONGC Videsh (OVL) completed the acquisition of an additional 12 percent stake in the Brazilian oil and gas field BC-10, the company announced.

The acquisition, post approval of the Brazilian regulatory authorities, was completed on Monday.

The purchase was part of the Brazilian national oil firm Petrobras' 35 percent stake in the oilfield, bought jointly by the Indian firm along with Royal Dutch Shell. While OVL picked up 12 percent for $561 million, the remaining 23 percent went to Shell.

Shell, thereby, increased its stake to 73 percent from 50 percent, while OVL's stake climbed to 27 percent from 15 percent in the Parque das Conchas project, OVL said.

"In August 2013, Petrobras entered into an agreement with Sinochem for sale of its 35 percent interest in the block for $1.543 billion. This agreement was subject to pre-emption rights of the partners. Shell and ONGC Videsh exercised their pre-emption rights for acquisition of 23 percent and 12 percent interest, respectively," the statement said.

OVL and Shell exercised a pre-emption right to block Petrobras' partner China's Sinochem Group from buying the Brazilian company's 35 percent interest in the oilfield.

The BC-10 block is located in the Campos Basin, around 120 km southwest from the city of Vitoria off the of Brazilian coast.