In September 2008, BPCL and Videocon Industries had formed a 50:50 joint venture to acquire a Brazilian oil exploration firm for $283 million.

 The two firms formed an incorporated joint venture IBV Brasil Petroleo Limitada to acquire Encana Brasil Petroleo Limitada from Canadian gas producers EnCana. Sources said usually such acquisitions are done through unincorporated joint ventures but BPCL chose to form an incorporated joint venture. Incorporated joint venture is organised as separate and distinct legal entity. And the entire entity is held in default if any one of the partners doesn’t pay for its share of cost.

 With bankrupt Videocon unable to pay its cash calls for exploration and development of the oilfields, IBV faced likelihood of a default and the risk of being booted out. To save the day, BPCL infused $53.98 mn in IBV in 2019-20, resulting in its share in the joint venture rising to 55.13 pc, sources with direct knowledge of the development said. Had BPCL acquired the Brazilian blocks through an unincorporated joint venture - the vehicle that India’s flagship ONGC Videsh Ltd most often uses, only Videocon would have been held in default upon not paying its share of cost. This default would not have affected BPCL.