Sinopec to pay $7.1B for 40% stake in Repsol's Brazilian assets

By Phaedra Friend Troy

China’s largest petroleum and petrochemicals company, Sinopec has agreed to pay Repsol $7.1 billion to jointly develop the Spanish company’s Brazilian assets.

Sinopec and Repsol have entered into an agreement to jointly develop the projects of Repsol Brasil, the company’s Brazilian subsidiary. The joint venture will create one of Latin America’s largest energy companies, valued at $17.773 billion.

Currently valued at $10.664 billion, the Repsol Brasil assets will be held 60 percent by Repsol and 40 percent by Sinopec.

Repsol contends that “the injection of funds generated by this transaction will allow Repsol Brasil to fully develop all of its current projects,” which include the massive Carioca and Guara pre-salt finds.

The offshore acreage includes the highly prolific Santos Basin pre-salt, as well as exploratory blocks in the Campos and Espiritu Santo Basins. The project portfolio includes interest in the producing field Albacora Leste, eight discoveries and numerous prospects.

In the Santos Basin, Repsol Brasil holds interest in Piracuca, Iguacu, Carioca, Guara, Sagitario, Teleferic, Pyro, Pepe, Vampira, Tingua and others. In the Campos Basin, the company also holds interest in the Pao de Acucar and Gavea projects, and in the Espiritu Santo Basin, it holds interest in Malawi, Caparao, Bacco, Tanganika, Eyasi and Vidigal.

Awaiting approval by the appropriate authorities, the agreement provides for full collaboration on existing developments, allowing for future expansions together or separately.

“The deal is a good reflection of the value created by the investment of technical, human and material means by Repsol in exploration, particularly in Brazil’s pre-salt offshore in the last few years,” said Antonio Brufau, Repsol chairman.



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