The Union Cabinet on Wednesday gave approval to state-owned Bharat Petroleum Corporation Ltd (BPCL) to invest an additional $1.6 billion in a Brazilian oil block.
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved additional investment by Bharat PetroResources Ltd (BPRL), a wholly-owned subsidiary of BPCL, for the development of the BM-SEAL-11 Concession Project in Brazil, an official statement said.
The block is to start production from 2026-27.
BPRL has a 40 per cent stake in the block. Brazil's national oil company Petrobras is the operator with 60 per cent interest.
Multiple oil discoveries have been made in the block, which is being developed now.
Originally, BPCL had partnered with Videocon for taking the stake in the block in 2008. IBV Brasil SA, a 50-50 joint venture between Videocon and BPRL Ventures NV, a unit of BPRL (the upstream arm of BPCL), held 40 per cent. But after the bankruptcy of Videocon, BPRL now owns the entire 40 per cent stake.
The CCEA nod will help to access equity oil to strengthen India's energy security and diversify the country's crude oil supply.
Stating that Indian oil companies have expressed interest in sourcing more crude oil from Brazil, the statement said it also strengthens India's foothold in Brazil, which will further open business avenues in neighbouring Latin American countries.
The CCEA also approved an increase in the limit of equity investment by BPCL in BPRL and authorised share capital of the company from Rs 15,000 crore to Rs 20,000 crore (to be subscribed by BPCL from time to time).
Also, the limit of equity investment by BPRL International BV in International BV Brasil Petroleo Limitada, through an intermediate wholly-owned subsidiary, to Rs 15,000 crore from the current limit of Rs 5,000 crore was also approved.