The Hindu Business Line : OVL, Petrobras sign MoU for E&P activities

ONGC Videsh Ltd (OVL) has signed an MoU with Brazil's Petrobras for strategic co-operation and participation in exploration and production (E&P) of hydrocarbons on-land and in shallow and deep waters.

The MoU was signed by Mr R.S. Sharma, Chairman of OVL and ONGC group of companies, and Mr Jose S. Gabrielli de Azevedo, President & CEO of Petrobras, in the presence of the Prime Minister, Dr Manmohan Singh, and the President of Brazil, Mr Luiz Incacio Lula da Silva, in Brazil.

The MoU follows the continuing inter-company co-operation, which led to OVL's maiden South American investment earlier this year, according to a company statement.

The MoU will facilitate opportunities for joint collaboration by the companies in India, Brazil and other countries.

In April 2006, Petrobras accommodated OVL's acquisition of 15 per cent of the equity in Block BC-10, located on the prolific Campos Basin in Brazil's deep waters.

Shell is the block operator, holding 50 per cent participating interest, with Petrobras holding the remaining 35 per cent interest.

The block is currently under development and production is scheduled to commence in the last quarter of 2009, with OVL's equity share at peak production expected to reach approximately one MMPTA.

BC10 - OVL's first venture in South America - calls for an upfront investment of about $410 million, including the acquisition consideration, plus an upside capex.

Announcing the MoU in Brasilia, Mr Sharma said: "We intend to use this opportunity to match strength with strength in our future endeavours."

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