India's state-run Bharat Petroleum Corp said it had signed a preliminary agreement with Brazil's national oil company Petrobras PETR4.SA to help it diversify its crude oil sourcing.
Indian state refiners rarely buy Brazilian oil. The Memorandum of Understanding (MoU) was signed by BPCL Chairman Arun Kumar Singh and Petrobras CEO Caio Paes de Andrade, BPCL said in a statement on Saturday.
The MoU will help the company to explore sourcing of crude oil through long term contracts "especially considering the current geopolitical situations," it added.
India recently allowed BPCL to invest $1.6 billion for developing an ultra-deep water hydrocarbon block in Brazil. The block is majority owned and operated by Petrobras.
Singh said: "Strengthening India's foothold in Brazil will further open business avenues in neighboring Latin American countries."
BPCL said the field development plan and final investment decision for the BM-SEAL-11 block is expected to be declared soon. Oil production from the block is expected from 2026/27.
BPCL is the second largest fuel retailer in India and operates three refineries in the country with a combined capacity of 706,000 barrels per day (bpd).
(Reuters - Reporting by Nidhi Verma; editing by Clelia Oziel)