India’s ONGC Videsh Limited (OVL) was among 11 foreign companies in Rio de Janiero on Oct. 21 at the bid for Brazil’s latest oil find, the Libra oil field. The winning consortium was made up of a Sino-European mix of four companies, with Brazil’s Petrobras holding the majority stake. Although OVL didn’t make the final cut, its presence in the bidding process points to India’s growing energy equation with Latin America, as does the recent success of Indian oil majors in acquiring large contracts in Latin America.
Eight Indian companies—OVL, Reliance Industries, Essar Oil, BPCL, Oil India, Videocon Industries, Assam Company and Indian Oil Corporation—are part of 12 joint ventures in Venezuela, Brazil, Colombia, Ecuador, Cuba and Peru. Their approach is pragmatic: invest substantial capital with state-run oil companies and use local expertise. The national oil companies in Venezuela and Brazil, PDVSA and Petrobras, respectively, get their governments’ support in procuring funding and project clearances, which further facilitates the joint ventures. As a result of the enhanced trade in oil from these countries to refineries at home, India’s total oil imports from Latin America increased from 4.5 percent in 2003 to 11 percent in 2012-13.