State-owned Bharat Petroleum Corporation Ltd (BPCL) has signed an agreement with Brazilian national oil company Petrobras to source oil from the Latin American nation.

Chairman and managing director Arun Kumar Singh and Petrobras CEO Caio Paes de Andrade signed a memorandum of understanding in Brazil, BPCL said in a statement on Saturday.

“The signing of the MoU will strengthen future crude oil trade relations between the two companies and explore potential crude import opportunities by BPCL on a long-term basis, especially considering the current geopolitical situations,” it said.

Singh said the association with Petrobras will help in achieving the goal of energy security for the country. BPCL imports a large volume of crude oil which is turned into fuel at its three oil refineries at Mumbai, Bina in Madhya Pradesh and Kochi in Kerala.

The firm, which gets the majority of its supplies from West Asian nations such as Iraq and Saudi Arabia, is looking to diversify its sources of supply in an attempt to cut down reliance on any particular region.

The recent approval by the Union cabinet to invest in Brazil will help diversify India’s crude oil supply.

“Strengthening India’s foothold in Brazil will further open business avenues in neighbouring Latin American countries,” he said.

Bharat PetroResources Limited (BPRL), the upstream oil and gas exploration and production subsidiary of BPCL, plans to invest $1.6 billion to develop an oil block in Brazil.

BPRL holds a stake in an ultra-deepwater hydrocarbon block in Brazil, owned and operated by Petrobras.

The field development plan and final investment decision is expected to be declared soon, the statement said without giving details.

On July 27, the Union cabinet gave approval to the firm to invest an additional $1.6 billion in the Brazilian oil block BM-SEAL-11.

The block is to start production from 2026-27. BPRL has a 40 per cent stake in the block. Brazil’s national oil company Petrobras is the operator with 60 per cent interest.

Multiple oil discoveries have been made in the block, which is being developed now. Originally, BPCL had partnered with Videocon for taking the stake in the block in 2008.

IBV Brasil SA, a 50-50 joint venture between Videocon and BPRL Ventures NV, a unit of BPRL (the upstream arm of BPCL), held 40 per cent. But after the bankruptcy of Videocon, BPRL now owns the entire 40 per cent stake.