In a significant development, state-run Bharat Petroleum Corporation (BPCL) on Saturday said it has signed an MoU with Brazilian oil major Petrobras in a bid to expand long-term crude oil sourcing of the world’s third largest energy consumer.
“The signing of the MoU will strengthen future crude oil trade relations between the two companies and explore potential crude import opportunities by BPCL, on a long term basis, especially considering the current geopolitical situations,” the Maharatna CPSU said in a statement.
Through its subsidiary, Bharat PetroResources (BPRL), BPCL has a stake in the upstream sector in an ultra-deep water hydrocarbon block in Brazil, owned and operated by Petrobras. The field development plan and final investment decision is expected to be declared soon.
BPRL plans to invest $1.6 billion to develop the oil block in Brazil in an attempt to procure equity oil overseas. The production from this block is expected from 2026-27.
A government official said that Indian oil companies are open to sourcing more crude oil from Brazil. Strengthening India’s foothold in Brazil will further open business avenues in neighbouring Latin American countries rich in several critical minerals such as Lithium and copper.
Strengthening energy ties
BPCL’s MoU with Petrobras follows the developments in April this year, When India and Brazil in a joint statement recognised the importance of more investments in the Brazilian oil and gas sector by Indian companies. The two nations also reaffirmed commitment to safeguard existing investments, while encouraging enhanced bilateral investments.
India had also expressed interest in sourcing crude oil under long term special contracts. Subsequently, in July, the Cabinet Committee on Economic Affairs (CCEA) approved an additional investment of $1.6 billion (about ₹12,000 crore) by BPRL for development of BM-SEAL-11 Concession Project in Brazil.
BPRL has 40 per cent participating interest (PI) in this concession along with Petrobras, the national oil company of Brazil, as the operator with 60 per cent PI.