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OVL Ups Stake in Brazil's Block BC-10, Gets 2 Exploration Blocks in Myanmar

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Oil and Natural Gas Corporation (ONGC) announced that its upstream subsidiary ONGC Videsh Limited (OVL), through its affiliates signed definitive agreements to acquire 12 percent Participating Interest (PI) in Block BC-10, Campos Basin, Deep Offshore Brazil as part of the sale of 35 percent share made by Petrobras. ONGC Videsh had earlier acquired 15 percent PI in the block in 2006. The other partners in the block were Shell, Operator with 50 percent PI and Petrobras with 35 percent PI. In August 2013, Petrobras entered into a Sales Transaction with Sinochem for disposal of their 35 percent PI in BC-10 for $1,543 million. This agreement was subject to Pre-emption rights of the partners Shell and ONGC Videsh. A pre-emption notice was served Sept. 17 by Shell and ONGC Videsh to jointly acquire 35 percent, in which 12 percent PI corresponds to ONGC Videsh. As a follow up of the Pre-emption Notice, ONGC Videsh through its affiliates has signed Sale and Purchase Agreements with Petrobras Oct. 11 for acquisition of 12 percent PI in the block, for a consideration $529.03 million. On closing, PI of OVL would increase to 27 percent. The acquisition of additional PI in the block is subject to approval of the Brazilian antitrust and regulatory authorities.

About BC-10 Asset:

The Block BC-10 also known as Parque das Conchas is in Campos Basin of Brazil and includes 4 offshore deepwater fields - Ostra, Abalone, Argonauta and Nautilus and a few identified exploration prospects. The block is in the deepwaters of Brazil in the water depths ranging from 4,921 to 6,398 feet (1,500 to 1,950 meters) and 75 miles (120 kilometers) from Vitoria town on the shore. The license for the fields expires in December 2032.

Myanmar Onshore Blocks Bidding Round-2013

In a separate development, ONGC Videsh has been awarded two onshore blocks namely B2 (Zebyutaung-Nandaw) and EP-3 (Thegon-Shwegu) in the Myanmar Onshore Bidding Round 2013. This was announced by the Ministry of Energy, Republic of the Union of Myanmar. Block B-2, having an area of 6,562 square miles (16,995 square kilometers), is located in Northern Myanmar, bordering state of Manipur in India and Block EP-3 having an area of 1650 sq. kms. is located in Central Myanmar.

Earlier, Government of Myanmar had announced Onshore 2nd Bid Round - 2013 for 18 blocks Jan. 17. ONGC Videsh was one of the 7 Indian companies which were shortlisted as Pre-qualified bidders.

ONGC Videsh has a decade old presence in the E&P sector of Myanmar with 17 percent non-operating stakes in the fields Shwe & Shwe Phyu (Block A1) and Mya North & Mya South (Block A3) with a total investment of $565 million as at Sept. 30. Myanmar is one of the focus countries for ONGC Videsh.

Expressing happiness on the developments, Sudhir Vasudeva, chairman noted that the above acquisitions should be seen in the context of the medium to long terms goals set for ONGC Group of Companies and in both these cases the Company has reinforced its presence in the fields/countries where it already holds the assets. He stated that “the acquisitions of producing and exploratory assets reflect the success of the strategy adopted by the company to quickly add reserves/production through a balanced portfolio approach.”

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