Chinese will pay US$2,94 billion to Brazil's largest oil company, which estimates more than 11 billion boe in Búzios. The contract provides for meeting the local content of 25%, and the project includes the interconnection of 14 wells to the FPSO

Petrobras informed yesterday, June 12, that it signed with Pré-sal Petróleo SA (PPSA) and partners CNODC Brasil Petróleo e Gás Ltda. (CNODC) and CNOOC Petroleum Brasil Ltda. (CNOOC) the Búzios Co-Participation Agreement, which will regulate the coexistence of the Transfer of Rights Agreement and the Transfer of Rights Surplus Production Sharing Agreement for the Búzios field, in the Santos Basin pre-salt.

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Petrobras has been claiming that Búzios is the largest oil field in deep waters in the world. Therefore, the company indicated more than 11 billion barrels of oil equivalent (boe) recoverable in the asset.

The contract provides for meeting the local content of 25%, a requirement provided for in the notice and committed to the ANP for the Búzios field.

The project provides for the interconnection of 14 wells to the FPSO, eight producers and six injectors, through subsea infrastructure, consisting of rigid production and injection pipelines and flexible service pipelines.

Currently, there are four units in operation in Búzios, which account for more than 20% of Petrobras' total production. The fifth, sixth and seventh platforms planned for the field are under construction, and the ninth unit (P-80) is in the hiring process, according to the company (with Reuters).

Negotiation

Negotiations began shortly after the bidding, which took place on November 6, 2019, in which Petrobras acquired 90% of the exploration and production rights of the excess volume of the Assignment of Rights in the Búzios field, in partnership with CNODC (5%) and CNOOC (5%). Together, the parties and PPSA defined the Field Development Plans, including production curve estimates, and using the oil and gas price assumptions, discount rate and cost metrics established in MME Ordinance No. 213/2019, aligning the following participations:

In this way, the amount of the total compensation, due to the Assignment Agreement, which belongs 100% to Petrobras, by the Production Sharing Agreement, is 29,4 billion dollars, which will be recovered as cost in oil by the contractors.

“As Petrobras has a 90% stake in the consortium of this contract, the value referring to the 10% stake of partners CNOOC and CNODC, in the amount of 2,94 billion dollars, will be received in cash by Petrobras on the date of effectiveness of the agreement”, said Petrobras.

Búzios will be 92,666% owned by the state-owned company, while each of the Chinese companies will have 3,667%

With the start of the agreement, Petrobras will hold a 92,666% stake in the Búzios deposit, while each of the Chinese companies will have 3,667%.

The effectiveness of the agreement is subject to approval by the National Petroleum, Natural Gas and Biofuels Agency (ANP), followed by payment of the CNOOC and CNODC partners' portion of the compensation to Petrobras.

According to Petrobras, the participation and compensation estimates presented are based on the effective date of the Agreement on 01/09/21, and, as soon as the date is confirmed with the approval of the ANP, the necessary adjustments will be made according to the accumulated production and investments made up to that date.

Petrobras also informed that it signed a contract with the joint venture formed by the companies Saipem and DSME in the amount of 2,3 billion dollars to supply the P-79 platform, the 8th unit to be installed in the Búzios field.

Petrobras presents the FPSO Carioca platform, at the Brasfels shipyard, in Angra dos Reis, and the Rio authority promises 5 jobs in shipbuilding for the state

Shipbuilding – Last Thursday (10/06), the largest oil company in Brazil invited authorities from the state of Rio de Janeiro to present the oil platform, FPSO Carioca, which is being built by Modec, at the Brasfels shipyard, in Angra dos Reis, on the Costa Verde do Rio. Two weeks before the end of the works, the unit, which belongs to Petrobras, will have its final destination in the Sépia field, in the pre-salt layer of the Santos Basin, where it will start operating in August.

The companies also commented on market difficulties in shipbuilding regarding technology, infrastructure, and lack of tax incentives to make them more competitive. According to the parliamentarian, there is a forecast of 5 new vacancies with construction in shipyards in the state.

“It is a market with a great contribution to the economic development of the state, with a growing perspective of new works, but which needs a development plan. With the construction of the P-78, MV-32 and Almirante Tamandaré Platform, there is a forecast of 5 new vacancies”, said the parliamentarian.