OVL eye 15% pie in Brazilian oil field

ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp, will buy a 15 per cent stake in Brazilian oil field from Royal Dutch/Shell.

OVL will take the stake in Block BC-10 in Brazil, sources said but did not give financial details.

OVL had originally bought US energy giant ExxonMobil's 30 per cent stake in BC-10 for $330 million. It had committed another $490 million, as its share of development cost.

However, Shell as the operator of the block had the first right of refusal on any stake sale in the venture by partners.

It exercised its pre-emption right and now OVL is buying half of that stake.

Shell would remain operator of the field with a 50 per cent stake while Petrobras will own the other 35 per cent, sources said.

Shell operates the Bijipura and Salema fields off the coast of Brazil where it has an interest in 14 exploration blocks. BC-10 field has production potential of 100,000 barrels of oil a day and is located about 120 kilometers (75 miles) south-east of the city of Vitoria, in the Brazilian state of Espirito Santo, in water as much as 200 meters (660 feet) deep.