Oil & Natural Gas Corp. (ONGC), India’s biggest explorer, is seeking to raise its stake in a Brazilian oil field that’s also the subject of a bid by China’s Sinochem Group, said two company officials with knowledge of the matter.
ONGC Videsh Ltd., ONGC’s overseas unit, has informed its local partner, Petroleo Brasileiro SA (PETR3) or Petrobras, that it intends to exercise its right to buy a 12 percent stake in the Parque das Conchas field, the two people said, asking not to be identified before an announcement. The price would be more than $500 million, one of the people said.
ONGC already owns 15 percent of the field, according to its website. Royal Dutch Shell Plc (RDSA), the operator of the block, holds 50 percent. Petrobras said last month it would sell its 35 percent stake in the offshore project to Sinochem for $1.54 billion. The existing partners in the field have the right of first refusal and can block the Chinese company’s offer, Petrobras said at the time.
ONGC Videsh and Shell will together buy the 35 percent stake that Petrobras had planned to sell to Sinochem, Press Trust of India reported earlier today. Shell would purchase 23 percent of the stake and ONGC the rest, it reported.
Sarah Bradley, a spokeswoman for Shell in London, declined to comment. Sudhir Vasudeva, chairman of ONGC, didn’t answer two calls to his mobile phone seeking comments
Two calls outside business hours to Petrobras’s press office in Rio De Janeiro went unanswered. Hu Hongjun, Sinochem Group’s Beijing-based spokesman, did not answer three calls to his office line seeking comment.
ONGC lost out on a $5 billion bid to buy a stake in Kazakhstan’s biggest oil field in July, after the government exercised its right to step in and purchase it in place of the Indian company. Kazakhstan then sold the stake to China National Petroleum Corp.
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