OVL's bids approved in Brazil, Trinidad and Tobago

OVL's proposal to buy 100% equity stake in two offshore Brazilian blocks has been approved by the Indian government's Committee of Secretaries.

May 2nd, 2008

Shirish Nadkarni
OGJ Correspondent

MUMBAI, May 2 -- ONGC Videsh Ltd.'s (OVL) proposal to buy 100% equity stake in two offshore Brazilian blocks has been approved by the Indian government's Committee of Secretaries. OVL is the overseas arm of India's Oil & Natural Gas Corp.

The committee also considered another OVL plan to take a participating interest in a block off Trinidad and Tobago that it was awarded in the 2007 exploration licensing round.

OVL was declared successful bidder for two offshore blocks—ES-M-470 and SM-1413—for which it had competed during the recently concluded ninth round of open bidding in Brazil. The Indian company had bid for five blocks.

Block ES-M-4670 covers 725 sq km and lies in 1,100-1,700 m of water and could hold either oil or gas. It is 35 km from the nearest producing field Peroa, which is owned by state-run Petroleo Brasileiro SA (Petrobras); and produces gas and condensate. The block lies 100 km from the Brazilian coast.

A consortium led by Petrobras and another led by Perenco also put in bids for the block. OVL offered a signature bonus of $18 million for the block.

Block SM-1413 covers 160 sq km and lies in 230 m of water. Petrobras operates a series of midsize oil fields in an adjacent acreage. A consortium of Petrobras and Colombian state-owned Ecopetrol also bid for this block. OVL's signature bonus offer of $12.6 million proved to be the highest.

The block in Trinidad and Tobago lies in shallow water in the twin-island nation's northern offshore margin. Three gas fields operated by the UK's BG Group—Hibiscus, Poinsettia, and Chaconia—are in the southern margin of the block.

The international competitive bidding round offered exploration and production rights in eight blocks in the Combined Southern basin land acreage and the South Coast Marine area, and three blocks in the Shallow Marine acreage, off the coast of Trinidad and Tobago, in 25-130 m of water.

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