On Wednesday, the Union Cabinet approved an additional investment of $1.6 billion (about Rs 12,000 crore) in Bharat PetroResources Ltd (BPRL) to boost overseas oil exploration.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the additional investment in developing the BM-SEAL-11 concession project in Brazil by BPRL, a wholly-owned subsidiary of Bharat Petroleum Corporation Limited (BPCL).

The block will start production in 2026-27. BPRL owns 40% of the block. Brazil’s state-owned oil company Petrobras is the operator, with a 60% stake. The block has made several oil discoveries and is currently under development.

BPCL acquired a stake in the block in partnership with Videocon in 2008. IBV Brasil SA is a 50-50 joint venture between Videocon and BPRL Ventures NV, a 40% subsidiary of BPRL’s upstream arm, BPRL. But after Videocon went bankrupt, BPRL now owns the 40% stake.

The approval of CCEA will help secure oil rights, strengthen India’s energy security and diversify the country’s crude oil supply.

Indian Oil Companies have expressed interest in sourcing more crude oil from Brazil, which it said also strengthens India’s foothold in Brazil, further opening up business channels with its Latin American neighbours, the statement noted.

The CCEA also approved an increase in BPCL’s equity investment limit in BPRL and the company’s authorized share capital from Rs 15,000 crore to Rs 20,000 crore (as subscribed by BPCL from time to time).

In addition, BPRL International BV, through an intermediate wholly-owned subsidiary, has been approved to raise the equity investment cap in International BV Brasil Petroleo Limitada to Rs 15,000 crore from the current Rs 5,000 crore.