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Why The OPEC+ Deal Won’t Cut It

Why The OPEC+ Deal Won’t Cut It

OPEC and its partners managed…

Total Buys Petrobras Assets In Brazil For $2.2B

Offshore

Total SA and Petrobras signed on Tuesday the final agreements on an asset package sale that will see the French major buy stakes in offshore concession areas from the Brazilian company as well as two onshore cogeneration plants in deals worth a total of US$2.225 billion.

The agreements – part of the two groups’ strategic alliance in upstream and downstream announced last October – include Petrobras transferring 22.5 percent of the rights in the concession area named Iara to Total. The Iara concession comprises the Sururu, Berbigão and Oeste de Atapu fields in Block BM-S-11. Through this agreement, Petrobras, which will continue to be operator with a majority interest of 42.5 percent, will be able to reduce its investment in the concession area. The other two participants in the Iara concession consortium are Shell’s subsidiary BG E&P Brasil with 25 percent, and Petrogal Brasil, with a 10-percent stake.

In another concession area deal, Petrobras will transfer 35 percent of the rights in the Lapa field concession area to Total. Brazil’s state-held company is also transferring the operatorship to Total, while remaining a shareholder with 10 percent. The Lapa field was put into production in December last year.

In the cogeneration plants deal, Petrobras will be transferring 50 percent interest in the Termobahia plants to Total. The two facilities are connected to the São Francisco do Conde regasification terminal, where Total will take regasification capacity to supply gas to the power plants.

Related: Oil Majors' Costs Have Risen 66% Since 2011

The strategic alliance with Total is part of Petrobras’ 2017-2021 business plan to boost its financial strength via risk mitigation, cash flow, and release of investments. Total, on the other hand, boosts its footprint in and offshore Brazil, gaining access to fields in the Santos Basin and entering the gas value chain, the companies said in a joint press release on Wednesday.

By Tsvetana Paraskova for Oilprice.com

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