OVL to buy ExxonMobil's Brazil oilfield pie

ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp, will acquire US energy firm ExxonMobil's 30 per cent stake in an oilfield in Brazil for about $1.4-billion.

"OVL has reached an agreement with ExxonMobil," a senior official in the petroleum ministry said.

Royal Dutch/Shell is the operator of the field with 35 per cent stake in the Campos Basin oilfield. Brazil's state-owned Petrobras has the remaining 35 per cent stake.

"Shell and Petrobras have pre-emption rights and their approval was contingent to OVL getting a stake," the official said.

The Cabinet Committee on Economic Affairs had on December 16 approved OVL's proposal to invest $820 million in the Brazilian field.

OVL would pay $330 million for acquiring the full equity of Exxon's Brazilian subsidiary and the remaining $490 million would be towards OVL's share of development cost.

ExxonMobil holds stake in two offshore blocks in the Campos Basin. It has a 30 per cent stake in Block BC-10, where an oil discovery with potential reserves of 400 million barrels had been made.

The government aims to ensure the company would get an average internal rate of return of at least 10 per cent on the investment, the official said.