TOTAL and Petrobras have signed final contracts to formally secure a strategic alliance that the two oil majors have been exploring since signing a memorandum of understanding in October 2016.
The companies say the alliance will allow them to combine their expertise in oil and gas, both in upstream and downstream sectors, in Brazil and around the world. They will cooperate on technical matters covering operations, research and technology. Total will also gain interests in some Petrobras assets.
Petrobras will transfer a 22.5% interest in the Iara region in Brazil, which includes the Sururu, Berbigão and Oeste de Atapu fields. Petrobras will remain the operator, with a 42.5% share, while Shell subsidiary BG E&P Brasil and Petrogal Brasil hold 25% and 10% respectively. Petrobras will transfer 35% of its stake in the Lapa field, meaning Total will become the operator. Petrobras will retain a 10% stake, with BG E&P Brasil holding 30% and Repsol-Sinopec Brasil holding 25%. Total will also gain 50% in two cogeneration plants, Rômulo de Almeida and Celso Furtado, in Bahia and regasification capacity in the São Francisco do Conde regasification plant, from which the plants receive their gas.
Previously, the two companies had agreed an option for Petrobras to purchase 20% interest in block 2 of the Perdido Foldbelt area in Mexico, joint exploration studies in Equatorial Margin and in Santos Basin in Brasil and a technological partnership in petrophysics, geological processing and subsea production systems.
Total will pay US$2.225bn to Petrobras as part of the deal, comprising US$1.675bn in cash, US$400m for part of Petrobras’ share in the Iara oil field and US$150m in contingent payments.
Total says that the formal alliance will allow it to reinforce its position in Brazil, with access to the new Santos Basin fields and the opportunity to enter the gas value chain. For Petrobras, forming such alliances is part of its 2021 business plan to share information, experience and technology, and mitigate financial risks. The two companies already jointly participate in 19 exploration and production consortia around the world.
“We are delighted today to see our strategic alliance becoming reality. These new partnerships together with a reinforced technological cooperation should create significant synergies and values, mutualising our operational excellence and further reducing costs on our joint projects for the benefit of both companies,” Pedro Parente, CEO of Petrobras and Patrick Pouyanné, chairman and CEO of Total, said in a joint statement.
Catch up on the latest news, views and jobs from The Chemical Engineer. Below are the four latest issues. View a wider selection of the archive from within the Magazine section of this site.