Total to Acquire $2.2bn of Petrobras Assets

Petrobras and Total signed late December 21 an assets swap in the framework of their strategic alliance announced in October 2016.

Total will acquire upstream and downstream assets in Brazil from Petrobras valued at $2.2bn made up of cash, carry and contingent payments.

Total will become partner to Petrobras in two high-quality pre-salt licenses of the prolific Santos basin: BMS-11 with the Iara fields currently under development where Total will acquire a 22.5% interest from Petrobras, and BMS-9 with the Lapa field which just started production and where Total will become operator with the acquisition of a 35% interest from Petrobras. The asset acquisitions are subject to final execution of sale and purchase agreements, regulatory approvals, and pre-emption rights on Iara.

It will mark a significant scaling up of Total's presence in Brazil, where to date its main interests are in the Libra deepwater offshore development and in the Bolivia-Brazil gas pipeline.

Total will also offer Petrobras the option of taking a 20% stake in the Perdido Belt deepwater exploration Block 2 recently awarded in Mexico.

Total CEO Patrick Pouyanne (Photo credit: Total)

The two companies will jointly assess exploration potential in key prospective areas in Brazil and develop new technologies, combining their deepwater expertise to jointly develop solutions for long subsea tie-backs, reservoirs with high CO₂ content, and digital geosciences data management.

Downstream, Total will enter the integrated gas and power market in Brazil: it will acquire from Petrobras some regasification capacity in the Bahia LNG terminal, a 50% interest in two co-generation plants located in the Bahia area, as well as pipeline transport capacity that will enable Total to supply gas to the two power plants, again subject to regulatory approvals.

Mark Smedley