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While the Indian firm will pick up 12.08 per cent stake in block BC-10, known as Parque das Conchas, the remaining 23 per cent will go to Shell.
Sources said OVL-Shell, who by virtue of their existing stake in BC-10 had a first right of refusal or pre-emption when fellow participants offer stakes for sale, have informed Petrobras about their decision.
India imports 78% of its crude oil needs.
India is seeking overseas partners from both the public and private sectors for its planned strategic petroleum reserve, Indian Petroleum and Natural gas Minister said recently.
OVL currently has a 15 per cent stake in the block which is entitled for an extra 8 per cent taken from the 35 per cent stake being sold by Petrobras. Shell is the operator with 50 per cent share.
But, OVL manged 12.08 per cent after convincing Shell to take a smaller than its entitled stake, sources said.
The BC-10 block off Brazil lies in ultra-deep water of 2,000 metres and began production in 2009. The Ostra field in the block pumps about 21,000 barrels per day of oil.
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.
“When Petrobras put its 35 per cent stake in BC-10 for sale, OVL evinced interest but for strategic reasons did not place a bid,” a source said.
OVL’s share of cost of developing the field is $748.05 million, of which $383 million has already been spent. The first two phase of the project are estimated to cost $4.987 billion (OVL’s share of 15 per cent bring $748.05 million).
OVL is a wholly owned subsidiary of Oil and Natural Gas Corporation Limited (ONGC), the national oil company of India, and is India’s largest international oil and gas E&P company.