New Delhi/Singapore: India’s top explorer Oil and Natural Gas Corp. Ltd (ONGC) has awarded its first mini-term tender to sell Brazil’s heavy crude oil Ostra in June-November to Shell, three people familiar with the matter said.
ONGC Videsh, the overseas investment arm of ONGC, owns a 27% stake in Brazil’s BC-10 block, and would sell its entire Ostra crude entitlement from the block over the period of the contract.
In the tender, ONGC offered to sell 750,000 barrels for lifting in June, but it specified no quantities for the remaining months of the period, according to a tender document seen by Reuters.
ONGC Videsh’s managing director N.K. Verma did not respond to Reuters calls seeking comment. Shell does not typically comment on commercial matters.
Royal Dutch Shell is the operator of the BC-10 block, which produces Ostra oil, and would be able to combine the ONGC volumes with its equity oil to form a standard cargo.
The standard cargo size that the FPSO at BC-10 can support is 950,000 barrels, also according to the tender document.
Shell has offered to pay a premium of about $2 a barrel to the term pricing formula that is linked to the prices of ICE Brent, and the average of spot differentials for Columbian Castilla Blend and Vasconia.
The BC-10 block produces about 40,000 barrels per day of Ostra crude. Shell has a 50% share in the block.