Total & Petrobras Signed an Assets Package Agreement

Source: www.gulfoilandgas.com 12/21/2016, Location: South America

Total and Petrobras signed an Assets Package Agreement in the framework of their Strategic Alliance announced in October 2016. This agreement reinforces the joint partnership and cooperation between the two companies, in the Upstream and Downstream sectors, covering operations, research and technology.

In the Upstream, the technical cooperation will be strongly reinforced between the two companies including joint assessment of the exploration potential in key prospective areas in Brazil and the development of new technologies.

Total will also become partner to Petrobras in two high-quality pre-salt licenses of the prolific Santos basin: the BMS-11 with the “Iara” fields currently under development where Total will acquire a 22.5% interest from Petrobras, and in the BMS-9 with the Lapa field which just entered into production and where Total will become the Operator of the license with the acquisition of a 35% interest from Petrobras. The two companies will combine their internationally recognized expertise in deep-water to jointly develop solutions for long subsea tie-backs, reservoirs with high CO2 content and digital geosciences data management. Total will also offer to Petrobras the option of taking a 20% stake in the Perdido Belt deepwater exploration Block 2 recently awarded in Mexico.

In the Downstream, Total will bring to Petrobras its worldwide experience by entering the integrated gas and power market in Brazil. Total will acquire from Petrobras some regasification capacity in the Bahia LNG terminal and a 50% interest in two co-generation plants located in the Bahia area as well as pipeline transport capacity, enabling Total to supply gas to the two co-generation plants.

Following signature, Patrick Pouyanné, Chairman and CEO, said: “I am delighted to see the concretization of our Strategic Alliance with Petrobras. These agreements will reinforce Total’s position in Brazil through access to outstanding pre-salt resources while entering the promising gas value chain. I’m confident that both companies will be able to create significant value by sharing their technical expertise, leveraging operational excellence and further reducing costs.”

Under the terms of this assets package deal, the acquisition of the Upstream and Downstream interests in Brazil from Petrobras will represent a global value of around 2.2 billion dollars, made of cash, carry and contingent payments. It is subject to the final execution of the Sale and Purchase agreements, to the relevant regulatory approvals and to partners’ preemption rights only on the Iara transaction.

Total and Petrobras:
Currently, Petrobras and Total jointly participate in 19 consortiums worldwide in Exploration and Production. In Brazil, the companies are partners in the development of the giant Libra field which is the first Production Sharing Contract in the Brazilian pre-salt Santos basin. Outside Brazil, Petrobras and Total are partners on the Chinook field in the US Gulf of Mexico, on the deep-water Akpo field in Nigeria and on the gas fields of San Alberto and San Antonio/Itau in Bolivia, as well as in the Bolivia-Brazil gas pipeline.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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