ONGC, Shell to pre-empt Petrobras oil block stake sale

Royal Dutch Shell and India's ONGCBSE 1.22 % plan to exercise their pre-emption rights to buy a 35 per cent stake in a Brazilian oil block that Brazil's Petrobras had planned to sell to China's Sinochem Group, two sources said.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap SME Special
Moneycontrol

Home » News » Business

Sep 16, 2013, 08.24 AM | Source: Reuters

ONGC, Shell to pre-empt Petrobras oil block stake sale

Royal Dutch Shell and India's ONGCBSE 1.22 % plan to exercise their pre-emption rights to buy a 35 per cent stake in a Brazilian oil block that Brazil's Petrobras had planned to sell to China's Sinochem Group, two sources said.

Like this story, share it with millions of investors on M3

ONGC, Shell to pre-empt Petrobras oil block stake sale

Royal Dutch Shell and India's ONGCBSE 1.22 % plan to exercise their pre-emption rights to buy a 35 per cent stake in a Brazilian oil block that Brazil's Petrobras had planned to sell to China's Sinochem Group, two sources said.

Post Your Comments

Share Cancel

Royal Dutch Shell and India's ONGC 1.22 % plan to exercise their pre-emption rights to buy a 35 percent stake in a Brazilian oil block that Brazil's Petrobras had planned to sell to China's Sinochem Group, two sources said.

Petrobras is shedding non-core assets to help finance a $237-billion, five-year investment plan. Last month it agreed to sell its stake in block BC-10, known as Parque das Conchas, in Brazil's Campos Basin, for $1.54 billion to Sinochem Group.

Also read: ONGC mulls using RIL infra for gas production

Existing participants in such projects often have a first right of refusal when fellow participants offer stakes for sale.

Oil and Natural Gas Corp ( ONGC ) currently has a 15 percent stake in the block, which would in theory entitle it to an extra 8 percent taken from the 35 per cent stake being sold by Petrobras. Shell is the operator with 50 percent share.

"ONGC will be buying between 10-15 percent share in the block, higher than its entitlement for 8 percent, while Shell will buy between 20-25 percent stake from Petrobras," said one of the sources, who both have knowledge of the development.

The second source said the decision to give a higher share to ONGC had been agreed with Shell.

No immediate comment was available on Friday from ONGC Videsh, the overseas investment arm of ONGC, while Shell declined to comment.

This will be the first case of an Indian explorer exercising pre-emption rights to block the sale of an oilfield stake to a Chinese firm.

A Chinese company this month secured a purchase that ONGC had been eyeing.

Kazakhstan used its pre-emptive rights to prevent the sale of US oil major ConocoPhillips' 8.4 per cent stake in the giant Kashagan oilfield to the Indian company. Kazakhstan then sold the stake to China National Petroleum Corp (CNPC).

The BC-10 block off Brazil lies in ultra-deep water of 2,000 metres and has been producing since 2009, since when output has totalled more than 70 million barrels of oil equivalent, Shell said in July.

A second-phase development is expected to start by the end of this year, with a peak production of 35,000 barrels of oil equivalent per day, according to Shell's website. 

Buy, Hold, Sell ? Hear it first on M3
ONGC, Shell to pre-empt Petrobras oil block stake sale

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login