Videocon, BPCL to buy Brazilian oil company

A consortium of oil refiner Bharat Petroleum Corp Limited (BPCL) and Videocon Industries has decided to buy Brazil's EnCana Brasil Petroleo Limitada for about $165 million (about Rs 675 crore).

Videocon, a diversified group whose businesses range from power to home appliances, and Bharat PetroResources Ltd (a subsidiary of BPCL) are equal partners in the consortium that will buy EnCana Brasil Petroleo from Canadian natural gas producer EnCana Corp and 749793 Alberta Ltd, the companies said in separate statements to the Bombay Stock Exchange.

BPCL, which did not disclose financial details, said the deal was for interests in 10 deepwater offshore exploration blocks in four concessions in Brazil.

The sale, which will be effective retrospectively from January 1, 2007, is subject to regulatory approval, pre-emptive right associated with certain assets, and is expected to close in the first quarter of 2008.

Indian companies have stepped up the pace of foreign acquisitions, striking deals worth more than $16 billion (about Rs 65,600 crore) to late-August this year, up from $6.2 billion (about Rs 25,400 crore) in the same period a year earlier, data from Dealogic showed. State-run BPCL, the country's third-biggest refiner, said earlier this month that it would spend up to $370 million (about Rs 1,500 crore) on exploration over two-three years, targeting small stakes in development and producing fields in West Africa, Brazil, South America and Australia.

BPCL, which has stakes in 14 oil and gas blocks in India and abroad, had set up Bharat PetroResources to spearhead its exploration drive, which it expects will offset under-recoveries in refining and marketing.

Shares in Videocon closed 0.48 per cent down at Rs 366 on the Bombay Stock Exchange, whereas BPCL was among the top gainers, up 0.5 per cent on the BSE at 310.60 in a generally firm market.