Statoil spends up to $2.9bn on more Brazil oil assets

Statoil ASA will buy a 25% stake in the Roncador oil field offshore Brazil from Petroleo Brasileiro SA for as much as $2.9bn, upping a bet on the Latin-American country as its biggest growth-engine after Norway. Statoil will make an initial payment of $2.35bn and as much as $550mn in contingent transfers for the Campos Basin field, which still holds recoverable resources of more than 1bn barrels of oil equivalent after producing since the 1990s, Statoil said in a statement yesterday.

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A man fishes in Guanabara Bay while an oil drilling platform floats in the background near Niteroi, Brazil (file). Statoil will make an initial payment of $2.35bn and as much as $550mn in contingent transfers for the Campos Basin field, which still holds recoverable resources of more than 1bn barrels of oil equivalent after producing since the 1990s, Statoil said in a statement yesterday.

The acquisition will almost triple Statoil’s production in Brazil, and the two companies plan to boost the field’s recovery further. The deal cements Brazil as the heart of Statoil’s international growth strategy for the coming years. Norway’s state-controlled oil producer has seized on lower asset prices during crude’s slump and a Petrobras divestment programme to build its position there, starting with last year’s $2.5bn acquisition of a stake in the Carcara oil discovery in the Santos Basin. Statoil operates the Peregrino field and has a stake in another billion-barrel discovery in the Campos Basin.

“This transaction adds material and attractive long-term production to our international portfolio, further strengthening the position of Brazil as a core area for Statoil,” chief executive officer Eldar Saetre said in the statement. The deal’s valuation is “neutral to positive,” Danske Bank A/S said in a note to clients. Petrobras will retain the operatorship and a 75% stake in the field, which last month pumped 240,000 barrels of oil and the equivalent of 40,000 barrels of gas a day. Statoil’s share of output brings the company’s equity production to about 110,000 barrels of oil equivalent a day compared to 40,000 barrels currently. The companies have identified measures to increase the remaining recoverable volumes at Roncador to at least 1.5bn barrels of oil equivalent. They will also apply increased-recovery techniques at other fields offshore Brazil, deepening a relationship that started last year in connection with the Carcara transaction.

The contingent payments in the transaction are linked to increased-recovery efforts, Statoil spokesman Erik Haaland said by phone. As part of the Roncador deal, Statoil will also have an option to use Petrobras’s Cabiunas natural-gas terminal in the development of the BM-C-33 block, which contains the Pao de Acucar discovery. The effective date is January 1, 2018, with closing subject to conditions including government approval. Petrobras CEO Pedro Parente will sign the agreement with Saetre in Oslo yesterday.

Sources and photo-credits: Gulf Times