ONGC Videsh Seeks to Raise its Stake in Block BC-10

India's ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil Natural Gas Corporation Ltd. (ONGC), exercised its pre-emption rights to acquire part of the 35 percent interest in Block BC-10 that Brazil's Petroleo Brasileiro S.A. (Petrobras) planned to sell to China's Sinochem Group for $1.54 billion, the Press Trust of India (PTI) reported Wednesday.

OVL and fellow joint venture partner Royal Dutch Shell plc will acquire Petrobras' stake in Block BC-10, sources with direct knowledge of the development said. The Indian upstream company will take a 12.08 percent stake and the remaining 23 percent will go to Shell. The two companies - which have a first right of refusal when a fellow participant offer its stakes for sale - have informed Petrobras about their decision.

At present, OVL has a 15 percent stake in the block, while Shell is the operator with 50 percent share. OVL Managing Director D K Sarraf declined comment citing confidentiality in the joint operating agreement, PTI said.

Sinochem inked an agreement with Petobras in August to acquire the Brazilian firm's stake in Block BC-10, known as Parque das Conchas. Production in the block, which is located in water depths of around 5,839.9 feet in the Campos Basin off Brazil, commenced in 2009.

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