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Rediff News  All News  » Business » ONGC inks swap deal with Brazil's Petrobras

ONGC inks swap deal with Brazil's Petrobras

June 04, 2007 15:57 IST

Oil and Natural Gas Corporation has offered Brazilian oil firm Petroleo Brasileiro SA (Petrobras) a stake in its east coast blocks in exchange for getting a 15 per cent stake in a Brazilian exploration acerage.

ONGC and Petrobras signed on Monday the swapping agreement that 'marks an increased presence of ONGC Videsh Ltd (the overseas arm of ONGC) in Brazil and the entry of Petrobras in India,' an ONGC press release said.

Although the release mentioned the 'swap' arrangement, it did not say which blocks ONGC was offering to Petrobras.

The agreement was signed by ONGC Chairman and Managing Director R S Sharma, OVL Managing Director R S Butola and Petrobras President Jose Sergio Gabrielli de Azevedo in the presence of Prime Minister Manmohan Singh and Brazilian President Luiz Inacio Lula da Silva in New Delhi, the release said.

Petrobras, according to the release, had in April last year 'accommodated OVL by waiving its right of pre-emption in the (Brazilian) offshore Block BC-10' where the Indian firm acquired 15

per cent interest from Shell.

Shell has 50 per cent stake in the block located about 120 km south-east of the city of Vitria, Esprito Santo State, in water depths ranging from 1,500-2,000 meters. Petrobras has the remaining 35 per cent.

"India was always a strategic country for us. The nature of this deal emphasizes the strength of our relationship with ONGC and our belief in the Indian story," Azevedo said.

Sharma said the agreement was the culmination of the MoU signed with Petrobras in September 2006 in Brasilia. "We look forward to partnering with Petrobras, one of the most renowned companies in deepwater operations. We strongly believe the expertise of Petrobras in deepwaters will be utilized in development of our offshore blocks in India," he said.

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