New Delhi: In a positive development of the ongoing trade talks between Prime Minister Manmohan Singh and visting Brazilian President Luiz Inacio Lula Da Silva, Oil and Natural Gas Corporation Ltd and Brazilian oil major Petroleo Brasileiro S.A. (Petrobras), announced on 4 June 2007 they will be swapping interests in offshore blocks in India and Brazil.
ONGC said in will be a release that an agreement to this effect was signed by ONGC group chairman R.S. Sharma, CEO of ONGC Videsh Ltd. (OVL) R.S. Butola, and Petrobas president Jose Sergio Gabrielli De Azevedo.
With this, OVL’s presence in Brazil will be consolidated, while Petrobas will gain entry into India. OVL is a subsidiary on ONGC.
The release said that earlier, Petrobras had accommodated OVL by waiving its right of pre-emption in the Brazilian offshore block BC-10, allowing OVL to pick up a 15% stake in the block from Shell. Thereafter, the companies had entered into a MoU to jointly participate in the oil and gas exploration in Brazil, India and third countries.
An ONGC spokesperson told Livemint that under the present deal, ONGC will offer its Indian offshore blocks in exchange to Petrobas. However, he declined to specify which blocks were being offered and did not provide additional information on the two companies’initiatives in bidding for offshore blocks jointly.
In an official statement released on 4 June, ONGC chairman R.S. Sharma said that the agreement signed on 4 June is the culmination of the MoU the Indian exploration major had signed with Petrobras in September 2006 in Brasilia.
He added that joining hands with Petrobas would broaden his organization’s portfolio in Latin America and that the partnership would be particularly useful to ONGC, given Petrobas’ expertise in Deepwater operations, which the Indian company could use in the development of its offshore blocks in India.
It might be recalled that Petrobas’deepwater discovery in the Krishna Godavari basin was estimated to hold up to 22 trillion cubic feet of gas.