Indian-government owned ONGC Videsh (OVL) has blocked a Chinese company from acquiring a stake in the Brazilian oilfields by utilising its pre-emptive right. 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, has a 15 per cent stake in BC-10, along with Royal Dutch Shell company.    

Royal Dutch Shell owns 50 per cent in BC-10. Now the two companies 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.    

OVL has informed this to 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.