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IN A breakthrough into the international deepwater oil exploration business, Videocon Industries and Bharat Petroleum Corp (BPCL) have jointly acquired a sizeable stake in Brazilian oil exploration company EnCanBrasil—a subsidiary of Canada’s Encana Corp.

The total value of the deal is estimated at around $425 million (Rs 1,700 crore), of which about $165 million (Rs 660 crore) will be paid upfront while the balance will be invested in exploration commitments.

Encana, which has an enterprise value of about $50 billion, has over the past two years exited other ventures to transform itself into a pure North American producer, focused on natural gas and oil sands.

Brazilian oil majors Petrobras and Anadarco are the two other partners in the EnCanBrasil consortium. When contacted, Videocon officials refused to comment while BPCL officials were not reachable. “The group has estimated oil reserves of over 5 billion barrels in the blocks,” sources said. The Indian consortium will now have a stake in EnCanBrasil’s 10 deep and ultradeep water blocks spread across four basins. The company has varying interests in each block with Brazilian national oil company Petrobras being the operator in seven.

The deal marks a big step for BPCL and Videocon, as both have been eyeing oil equity globally. BPCL, till date largely focused on oil refining and marketing, recently embarked on an aggressive acquisition programme in oil exploration. Earlier this year, it acquired three blocks in the North Sea along with Tata Petrodyne.

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