ONGC Videsh may get 2nd oil block in Brazil

Next destination is oil-rich Venezuela.

ONGC Videsh (OVL), the overseas investment arm of Oil and Natural Gas Corporation (ONGC), is likely to get its second oil block in Brazil.

OVL, which has hydrocarbon assets in 16 countries, had bid for the block under the eighth round of auction of oil blocks in Brazil.

The S-M-1103 offshore block in the Santos basin is believed to have the potential for natural gas and light oil. "There is information that we have won one block in Brazil," OVL Managing Director Ranbir Singh Butola said.

The Brazilian government is yet to make an official announcement. OVL had bid on its own for the Brazilian block and would own 100 per cent stake.

OVL already has a 15 per cent stake in the BC-10 deep water block for which it paid around $170 million. Shell is the operator in the block with 50 per cent equity stake, while Petrobras holds the remaining 35 per cent stake.

The ONGC subsidiary is also set to pick up 30 per cent stake in the San Cristobal block in Venezuela in partnership with Petroleos de Venezuela (PDVSA), which is a state-owned company.

"We have decided to award a stake in the San Cristobal block to OVL," PDVSA Vice-President (E&P) Luis F Vierma said.

ONGC will partner PDVSA in exploring oil in the onshore San Cristobal field, which has a potential to produce 100,000 barrels of crude oil per day. Butola added there was a possibility of PDVSA setting up a refinery in India.

A PDVSA delegation had arrived in India last week and visited Mangalore Refinery and Petrochemicals (MRPL), a subsidiary of ONGC. The PDVSA team also visited the Mehsana oil field in Gujarat.

"PDVSA is interested not only in a refinery but also in heavy oils processing. Their team visited all our facilities. There are a lot of possibilities," a senior OVL official said.