Videocon Industries, which is part of a consortium with state-run oil refiner Bharat Petroleum Corp Ltd (BPCL), has announced the acquisition of Brazilian Oil exploration firm EnCana Brasil Petroleo Limitada (EBPL) for $283 million (over Rs 1,309 crore). The 50:50 joint venture of Bharat PetroResources Ltd (a BPCL subsidiary) and Videocon Industries has completed the acquisition of the entire stake of EBPL from Canadian gas producers EnCana Corp and Alberta Ltd, Videocon said on Friday in a filing to the Bombay Stock Exchange.
The acquisition, which was completed in Rio de Janeiro on September 18, has been made for a consideration of $165 million. The consortium will make a further payment of $118 million as reimbursement of expenses of EBPL since January 1, 2007.
EBPL?s assets include ten deep water offshore petroleum exploration blocks in four concessions in Brazil. Petroleo Brasileiro SA (Petrobras), the national oil company of Brazil, is the operator in three of these four concessions. Anadarko Corporation, USA, through its Brazilian subsi-diary, is the operator in the remaining concession.
Last year, Videocon and BPCL had entered into an agreement with EnCana Corp and Alberta Ltd to acquire their exploration arm, saying that the deal was for interests in 10 deep-water offshore exploration blocks in four concessions in Brazil.
Meanwhile, shares of BPCL were down 0.77% to last trade at Rs 346.05. Videocon stocks closed at Rs 229.95, up 5.80% from the previous day?s close on the Bombay Stock Exchange on Friday.
The deal marks a significant step for BPCL as well as Videocon; both have been eyeing oil equity globally. BPCL, so far focused on oil refining and marketing, recently embarked on an oil exploration acquisition programme. Earlier this year, it acquired three blocks in the North Sea in collaboration with Tata Petrodyne.
In case of Videocon, though consumer business contributes roughly 90% to its Rs 15,000-crore turnover, oil business brings in more than half of its profits. With increasing pressure on margins in the white goods business, the company is trying to increase its exposure to the oil sector. Incidentally, Videocon?s 25% holding in the Ravva oilfield has emerged as a money spinner for the company.