India aims to stem firms' losses: Deora ONGC to buy stake in Brazilian field

Mumbai: India's state-run Oil and Natural Gas Corp Ltd has struck a deal with ExxonMobil Corp to buy the oil major's 30 per cent stake in Brazil's "Project Sugar Loaf", a company spokesman said yesterday.

"Our offer has been accepted by ExxonMobil and we are now working out the nitty-gritties of the deal," the spokesman said, confirming a newspaper report.

A company source said the deal was worth $1.4 billion.

The spokesman said ONGC was awaiting formal approval from the Brazilian government.

"We expect the deal to be finalised in a couple of weeks," he said, adding that this was ONGC's second biggest acquisition after a $2.7 billion investment in Russia's ExxonMobil operated Sakhalin-I project, in which ONGC has a 20 per cent interest.

He said the leading domestic explorer had also initiated negotiations with Exxon's partners in block BC-10 Royal Dutch Shell and Brazilian state company Petrobras seeking their approval for the acquisition.

Meanwhile, India's most valuable company, Oil and Natural Gas Corp Ltd (ONGC), said yesterday its quarterly net profit rose 11 per cent, ahead of forecasts, as high oil prices outweighed the subsidies paid to refiners.

The state-run oil and gas producer said net profit rose to Rs38.88 billion ($881 million) in the quarter to December, up from Rs34.93 billion in the same period a year ago.

The subsidy burden for the quarter stood at Rs28.43 billion, an ONGC spokesman said.

Nine analysts polled by Reuters had forecast a 10 per cent increase in net profit to 38.27 billion rupees. ONGC shares closed 2.5 per cent down at Rs1,236.1 on Mumbai market.

New Delhi (Reuters) India's new oil minister, Murli Deora, said yesterday he wanted state-run energy firms to become profitable again but added that providing affordable fuel for the poor was a priority.

Deora said he would continue the government's policies of seeking private investment for oil exploration and searching for petroleum assets abroad.

"It is premature for me at this moment to comment on details," Deora told reporters after after taking charge of the ministry. "I will be getting into the details of the functioning of the ministry over the next several days and weeks."

Deora said Prime Minister Manmohan Singh's government had pursued a policy of securing energy supplies capable of meeting India's future fuel needs.

"I will continue to steer the ministry to achieve this strategy of ensuring fuel supplies and the energy security of our nation," Deora said. The appointment of Deora was one of the biggest changes in a cabinet reshuffle announced by Singh on Sunday.