* ONGC to buy 10-15 pct share of Petrobras, Shell to acquireremainder
* First use of pre-emptive right by India to halt sale toChinese firm
By Nidhi Verma
NEW DELHI, Sept 13 (Reuters) - Royal Dutch Shell and India's ONGC plan to exercise their pre-emptionrights to buy a 35 percent stake in a Brazilian oil block thatBrazil's Petrobras had planned to sell to China's SinochemGroup, two sources said.
Petrobras is shedding non-core assets to helpfinance a $237-billion, five-year investment plan. Last month itagreed to sell its stake in block BC-10, known as Parque dasConchas, in Brazil's Campos Basin, for $1.54 billion to SinochemGroup.
Existing participants in such projects often have a firstright of refusal when fellow participants offer stakes for sale.
Oil and Natural Gas Corp (ONGC) currently has a 15 percentstake in the block, which would in theory entitle it to an extra8 percent taken from the 35 percent stake being sold byPetrobras. Shell is the operator with 50 percent share.
"ONGC will be buying between 10-15 percent share in theblock, higher than its entitlement for 8 percent, while Shellwill buy between 20-25 percent stake from Petrobras," said oneof the sources, who both have knowledge of the development.
The second source said the decision to give a higher shareto ONGC had been agreed with Shell.
No immediate comment was available on Friday from ONGCVidesh, the overseas investment arm of ONGC, while Shelldeclined to comment.
This will be the first case of an Indian explorer exercisingpre-emption rights to block the sale of an oilfield stake to aChinese firm.
A Chinese company this month secured a purchase that ONGChad been eyeing.
Kazakhstan used its pre-emptive rights to prevent the saleof U.S. oil major ConocoPhillips' 8.4 percent stake inthe giant Kashagan oilfield to the Indian company. Kazakhstanthen sold the stake to China National Petroleum Corp (CNPC).
The BC-10 block off Brazil lies in ultra-deep water of 2,000metres and has been producing since 2009, since when output hastotalled more than 70 million barrels of oil equivalent, Shellsaid in July.
A second-phase development is expected to start by the endof this year, with a peak production of 35,000 barrels of oilequivalent per day, according to Shell's website.
