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Business
Special Correspondent
 OIL EQUITY: Subir Raha (left), Chairman and Managing Director, ONGC, with Guy Outen (right), Executive Vice President, Business and Development, Shell, and Vikram Singh Mehta, Chairman, Shell Corporation in India, at the signing ceremony for Block BC10, Brazil, in New Delhi on Thursday.
NEW DELHI: India and Brazil are set for closer ties in the oil and gas sector with the overseas subsidiary of the Oil and Natural Gas Corporation Limited (ONGC) taking an equity stake in an offshore Brazilian oilfield. In addition, ONGC Chairman, Subir Raha, has invited investment for new grassroots refineries from the Brazilian oil company, Petrobras, especially to utilise technology for producing ethanol. The proposal for closer India-Brazil ties in the hydrocarbon sector was made at a function to sign an agreement between ONGC Videsh Limited (OVL) and the global oil major Shell here on Thursday for acquiring a 15 per cent equity stake in a Brazilian oilfield known as BC-10. OVL will pay about $170 million for buying this stake from Shell. The OVL Managing Director, R. S. Butola, said the company would spend another $234 million as its share of the cost involved in bringing the field to production by 2009-end. Shell, as the operator of the block, had the first right of refusal on any stake sale in the venture by partners. It exercised its pre-emption right and now OVL is buying half of that stake. Shareholding in the partnership now stands at 50 per cent for Shell, 35 per cent for the Brazilian oil company, Petrobras, and 15 per cent for OVL. © Copyright 2000 - 2006 The Hindu
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 Date:28/04/2006 URL: http://www.thehindubusinessline.com/2006/04/28/stories/2006042803040300.htm ONGC invites Petrobras to invest in refining ventures Our Bureau
New Delhi , April 27 Oil and Natural Gas Corporation has offered stake in its refining ventures to Brazil's state-run oil company Petrobras. The Chairman and Managing Director of ONGC, Mr Subir Raha, said here on Thursday that ``we have plans for building a few grassroots refineries. We invite Petrobras to take equity in these projects. We feel co-operation with Petrobras will enhance our technical ability, as they have recognised excellence in ethanol technology.'' Mr Raha, however, did not comment on which projects would be offered to Petrobras for investment but only said opportunities were available for exploitation. Speaking at a conference to announce the entry of ONGC Videsh Ltd (OVL), the overseas arm of ONGC, into Brazil by picking up 15 per cent stake in an oil field in that country, Mr Raha said, besides Petrobras participation in India, ONGC would also look at working together with the Brazilian company in third countries. Hiking refining capacity ONGC has plans to increase its refining capacity to 45.9 million tonnes (mt) a year from the current 10 mt by the fiscal ending March 2010. For this, the company is building new refineries and expanding the capacity of its Mangalore refinery. It has also proposed building a refinery in Andhra Pradesh and Rajasthan. OVL to pay $170 m ONGC Videsh will pay about $170 million for buying a 15 per cent stake in a Brazilian oil field from Royal Dutch/Shell. The OVL Managing Director, Mr R.S. Butola, said that his company would spend another $234 million as its share of the cost involved in bringing the field to production by the end of 2009. OVL had originally bought ExxonMobil's 30 per cent stake in BC-10 for $330 million. It had committed another $490 million as its share of development cost. However, Shell, as the operator of the block, had the first right of refusal on any stake sale in the venture by partners. It exercised its pre-emption right and now, OVL is buying half of that stake, he explained. OVL and Shell inked the shareholders agreement, which assigned 15 per cent stake in BC-10 to the former. While Shell would remain the operator of the field with a 50 per cent stake, Petrobras will own the remaining 35 per cent and OVL 15 per cent. Mr Butola said the field holds 400 million barrels of oil reserves and has potential to produce 100,000 barrels per day. Stating that OVL is looking forward to future opportunities in Brazil, he said that his company is planning to bid for oil and gas blocks offered under the latest round of auctions in Brazil, which is open till November. No case for bonus Mr Raha said there was no case for bonus shares as the company's equity base was already very large. ``I don't think there is a case for issue of bonus shares as our equity base is already vary large and such a move would reduce earnings per share,'' he told newspersons at the sidelines of a conference. Asked whether the company has received any instruction from the Finance Ministry to consider stock split and bonus issues, Mr Raha said the company had not received any instruction. © Copyright 2000 - 2006 The Hindu Business Line
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