PARIS – Total and Petrobras have signed an assets package agreement in the framework of their strategic alliance announced in October.
It reinforces the cooperation between the two companies both upstream and downstream, covering operations, research, and technology.
The two companies will strengthen their technical cooperation upstream by jointly assessing the exploration potential in prospective areas in Brazil and the development of new technologies.
In addition, Total will partner with Petrobras in two presalt licenses 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 companies will 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.
Dr. Valentina Kretzschmar, director, Corporate Research at analyst Wood Mackenzie, commented: “Following a period of deep cuts, which helped bring down Total’s cash flow breakevens to a sustainable level, the company is now shifting its strategy towards more aggressive business development.
“A rebound in oil prices, combined with a new phase of strong cash flow growth, will fuel Total’s new business development opportunities.
“Presalt deepwater Brazil offers access to low-cost, long-life resources, and will help shift Total’s portfolio to the lower end of the cost curve - in line with the company’s strategy.”