Brazil’s Petrobras signs US$2.2 bn strategic alliance deal with France’s Total

Brazil’s semi-public multinational petroleum corporation, PetróleoBrasileiro S.A. (Petrobras), has signed an assets package agreement with the French petroleum company Total in line with the Strategic Alliance Accord they signed in October.

Total will pay US$2.2 billion in the way of cash and investments in return for participation in several sub-salt oil fields. According to local media, Petrobras will receive US$1.6 billion upfront in cash in the agreement.

The deal reinforces the cooperation between the two companies both upstream and downstream, covering operations, research, and technology.

Among the items in the accord is the sale of participation in two pre-salt layer areas in the Santos basin – in BMS-11, which contains the Iara field currently under development, Total will acquire a 22.5% interest from Petrobras (subject to partner and regulatory approvals), while in BMS-9, where the Lapa field just entered production, Total will become operator, taking a 35% stake.

The two companies will also share the use of the Bahia regasification terminal, with a capacity of 14 million cubic meters per day (mcm/d) and a partnership – with Total holding a 50%share – in two thermal plants located in Bahia.

Petrobras and Total will also pool their deepwater experience to jointly develop solutions for long subsea tiebacks, reservoirs with high carbon-dioxide content, and digital geosciences data management.

Total will also offer Petrobras the option of taking a 20% stake in the Perdido Belt deepwater exploration block 2 it was recently awarded offshore Mexico.

Currently, Petrobras and Total jointly participate in 19 consortia worldwide in exploration and production. They are co-developers of the giant Libra field in the presalt Santos basin; the Chinook field in the US Gulf of Mexico; and the deepwater Akpo field offshore Nigeria.

“It is a partnership that makes a lot of sense for Petrobras and we are very pleased to have reached the point where we have concluded this general agreement, with the signing of the specific contracts,”Petrobras president Pedro Parente said.