India’s Videocon, BPCL to buy Brazilian oil firm

A consortium of India’s oil refiner Bharat Petroleum Corp Limited (BPCL) and Videocon Industries have jointly entered into an to buy Brazil’s EnCana Brasil Petroleo Limitada for about $165 million.

Videocon, a diversified group whose businesses range from power to home appliances, and Bharat PetroResources Ltd (a subsidiary of BPCL) are equal partners in the consortium that will buy EnCana Brasil Petroleo from Canadian natural gas producer EnCana Corp and 749793 Alberta Ltd.

The sale is expected to close in the first quarter of 2008. The effective date of the transaction has been agreed upon as January 1, 2007.

EnCana’s Brazil interests in this sale include 10 offshore exploration blocks, including Espirito Santo, Sergipe-Alagoas, Potiguar and Campos Basin concessions.

With this sale, which is expected to generate an estimated after-tax gain to net earnings of about $75 million, EnCana is exiting Brazil. In combination with the company’s previous sale of its interest in the Chinook oil discovery in 2006, total Brazil divestiture proceeds are estimated to be about $530 million, resulting in an estimated after-tax gain to net earnings of about $330 million.