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ONGC Videsh Ltd (OVL) has used its pre-emptive right to block a Chinese company from acquiring a stake in the Brazilian oilfields. The Brazilian state-owned Petrobras had planned to sell its 35 per cent state in block BC-10 in the Campos Basin to the Chinese Sinochem group for $1.54 billion.OVL, which has a 15 per cent stake in BC-10, along with Royal Dutch Shell, which owns 50 per cent, have invoked for the first time the first right of refusal or pre-emption option to buy out Petrobras’ share.OVL, which was entitled to an extra 8.08 per cent from the 35 per cent stake sold by Petrobras, has sought to buy a larger 12.08 per cent stake. While OVL officials refused to comment, sources said that the company has informed Shell, which has agreed to purchase the remaining 23 per cent. The BC-10 block is in ultra-deep water of 2,000 metres and has been producing oil since 2009. The output has totalled more than 70 million barrels of oil equivalent since then.A second-phase development is expected to start by the end of this year, with a peak production of 35,000 barrels of oil equivalent per day, according to Shell.Sources told Business Line that this was purely a business decision by the existing stakeholders in the block.
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