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Petrobras chief executive Pedro Parente said at an event yesterday that the company was preparing to announce a partnership for the development of the prolific Campos Basin that would extend its productive life by over four decades. Keeping an air of mystery, Parente did not add any details about the partner or the nature of the partnership—he said only that it did not involve Exxon.
The clarification was necessary as the hint of a new partner comes on the heels of the announcement of a strategic alliance between Petrobras and Exxon. The alliance follows Exxon’s winning bids for 10 oil blocks in Brazil’s deep waters at a September auction that marks a turn for the local oil industry after years of Petrobras’ reign. The new government hopes to lure back investors by privatizing a string of state companies and by opening up the pre-salt layer oil wealth to all who are interested.
The U.S. giant partnered with Petrobras for six of the ten fields that fetched a total US$1.2 billion (3.8 billion reias). For one of the fields, located in the Campos Basin close to the pre-salt zone, Exxon and Petrobras bid US$700 million (2.24 billion).
The oil reserves of the Santos Basin were first discovered in the early 1970s and since then, some of Brazil’s largest fields have been discovered in the offshore area spanning 100,000 sq km. Among the international companies with operations in the Campos basin are Norway’s Statoil, French Total, Shell, and Chevron.
Brazil is turning quickly into the sweet spot of the international oil industry, which is struggling to replace its reserves after a couple of years of deep investment cuts to weather the effect of the 2014 oil price crash. Brazil seems to be something of a Goldilocks oil industry location, in comparison with, say, the Arctic, or U.S. shale, although Mexico and Argentina are breathing down its neck with relaxed foreign investment tax regimes and incentives, and with estimates of huge reserves.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.