Indian Government Evaluating OVL's $1.17 Billion Investment in Petrobras' SEAP-II Project

The Indian government is currently reviewing a proposal from ONGC Videsh (OVL), a subsidiary of the state-owned Oil and Natural Gas Corporation, to invest $1.17 billion in the development phase of Petrobras' SEAP-II project. This project is part of the BM-SEAL-4 block located offshore Brazil. The proposal is under inter-ministerial consideration, and if approved, it would strengthen India's presence in Brazil's offshore energy sector by adding to its portfolio of equity oil assets in the country.

OVL's Existing Stake and Expenditure

OVL already holds a 25% participating interest in the BM-SEAL-4 block, while operator Petrobras retains the remaining 75% stake. The Indian state-owned company has previously incurred $123 million in exploration expenditure for this Brazilian offshore asset.

Petrobras' FPSO Contracts and Project Details

In early April, Petrobras finalized negotiations with SBM Offshore for two floating production, storage, and offloading (FPSO) vessels: the P-81 and P-87, at costs of $3.79 billion and $4 billion, respectively. The P-87 FPSO, destined for the SEAP-2 project where OVL has a key stake, will process 120,000 barrels per day (bpd) of oil and 12 million cubic meters per day (MMcmd) of natural gas. The P-81 FPSO, slightly smaller at 120,000 bpd and 10 MMcmd, will be deployed at the SEAP-1 project. First oil from the P-87 is scheduled for 2030, followed by the P-81 in 2031. Both FPSOs will operate under a build-operate-transfer (BOT) model for six and a half years each, after which operation will transfer to Petrobras.

Field Development and Deployment

The P-87 FPSO will produce from blocks BM-SEAL-4, BM-SEAL-4A, and BM-SEAL-11, which contain the Budiao, Budiao Noroeste, and Budiao Sudeste fields. The P-81 FPSO will be deployed in blocks BM-SEAL-10 and BM-SEAL-11 to produce from the Agulhinha, Agulhinha Oeste, Cavala, and Palombeta fields. Both FPSOs will be installed in a new frontier offshore Brazil, on the country's northeastern coast, in water depths exceeding 2,500 meters.

BPCL's Involvement in SEAP-1 Project

India's Bharat Petroleum Corporation (BPCL) is a key stakeholder in Brazil's SEAP-1 project, located in the BM-SEAL-11 concession. BPCL, along with its subsidiaries, holds a 65.4% stake in IBV Brasil Petroleo (IBV), which in turn holds a 40% participating interest in the BM-SEAL-11 concession. Petrobras operates the concession with a 60% stake. BPCL confirmed that Petrobras approved the final investment for the SEAP-1 project, and IBV's total investment in the project is expected to be approximately $2.8 billion.