U.S. Markets closed

ONGC to buy 12 pct of Brazil block from Petrobras for $529 million

REUTERS - State-run explorer Oil and Natural Gas Corp (NSI:ONGC.NS - News) said its overseas arm has agreed to buy an additional 12 percent stake in a Brazilian oil block from Brazil's Petrobras (SAO:PETR4.SA - News) for $529 million.

Petrobras had earlier agreed to sell its 35 percent stake in the block to China's Sinochem Group for $1.54 billion, but the deal was subject to pre-emption rights of ONGC and Royal Dutch Shell (LSE:RDSA.L - News).

Shell is the operator of the block with a 50 percent stake, while ONGC already owns 15 percent of the block.

Shell and ONGC Videsh served a pre-emption notice on September 17 to jointly acquire the 35 percent stake, ONGC said in a statement to Indian stock exchanges on Monday.

Reuters last month reported that the companies were planning to exercise their pre-emption right on the stake.

(Reporting by Devidutta Tripathy in New Delhi; Editing by Supriya Kurane)