Total strengthening its presence in Brazil with more than $2bln acquisitions

Courtesy of ArabianOilandGas.com

Courtesy of ArabianOilandGas.com

Petrobras and Total signed the definitive contracts regarding assets contemplated in the Strategic Alliance, as defined in the 21st of December, 2016 agreement.
The contracts signed yesterday seal the Strategic Alliance between the two companies creating new partnerships in the Upstream and Downstream sectors, together with a reinforced technical cooperation covering operations, research and technology.
As part of this contract, Petrobras will transfer 22.5% of its rights in the Iara field, diluting Petrobras’ interest to 42.5%. The other participants are BG E&P Brasil, a Royal Dutch Shell subsidiary, with 25% and Petrogal Brasil, with 10%.
Moreover, Petrobras will transfer 35% of rights to Total, in the Lapa field concession area, which started its production at the end of 2016, and will also transfer the operatorship to Total whereas Petrobras will remain in the license with 10%. Other partners are BG E&P Brasil, a Royal Dutch Shell subsidiary, with 30% and Repsol-Sinopec Brasil , with 25%.
Finally, the agreement will also deal with power generations plants: Petrobras will transfer 50% interest to Total in Termobahia composed of 2 cogeneration plants, Rômulo de Almeida and Celso Furtado, located in Bahia area. The two plants are connected to the regasification terminal located in São Francisco do Conde, also in Bahia where Total will take regasification capacity to supply gas to the power plants.
Through this transaction, Total will pay to Petrobras a global amount of $2.225 billion made of $1.675 billion cash for assets and services, $400 million that can be triggered to carry a part of Petrobras’s investment share in the Iara development fields and $150 million as contingent payments.