16 September 2013, News Wires – Shell and India’s Oil & Natural Gas Corporation, ONGC, look set to scupper the $1.54 billion purchase from Petrobras by Sinochem Group of a stake in a Brazilian offshore oil block, according to a report.
The Anglo-Dutch supermajor and ONGC intend to exercise pre-emption rights to increase their holding in Block BC-10, known as Parque das Conchas, in the Campos basin, according to Reuters.
Almost exactly a month ago, 35% stakeholder Petrobras agreed to sell its share to the Chinese giant as it looks to complete the bulk of $9 billion in planned divestitures by the end of the year in order to fund the world’s largest capital expenditure programme.
As part of that agreement with Sinochem, however, existing block partners Shell and ONGC were given 30 days in which to exercise their rights to increase their respective holdings. They each had 30 days from the date of Petrobras’ announced intention to sell to Sinochem to exercise their pre-emption rights.
Reuters cited two unidentified sources on Friday as indicating that both companies are indeed planning to do this.
Shell, which is operator of the block on 50%, is set to take between 20% and 25% more with ONGC looking at between 10% and 15%.
A Shell spokesperson said the company has no comment to make on the report. Nobody was available for comment at ONGC’s New Delhi headquarters on account of the time difference.
Block BC-10 located around 100 kilometres off the southern coast of Espirito Santo state.
On Thursday, Shell awarded FMC Technologies the contract for the supply of subsea systems at phase three of the Parque das Conchas development less than two months after the Anglo-Dutch supermajor sanctioned the latest developmental stage.
FMC will supply seven subsea trees, a pair of manifolds, associated control systems, tie-in connection systems and subsea distribution hardware.
Shell has already said it expects the third phase to add 28,000 barrels of oil equivalent per day at peak output to the deep-water complex.
The third phase will include the installation of subsea-infrastructure at the Massa and Argonauta O-South fields, which will be tied back to the Espirito Santo floating