Petrobras Oil Fields Receive Proposals From PetroRio and Karoon Energy

Brazilian PetroRio SA and Australian Karoon Energy Ltd Are Among Bidders for a Petrobras Shallow Water Oil Field, According to Two Sources Who Prefer to Remain Anonymous. These Assets for Sale Are Part of an Ambitious Divestment Program by the State-Owned Company

With an oil production of about 34,000 barrels per day, the Bauna field in the Santos Basin, Brazil, is among the largest mature production assets in Petrobras’s US$ 26.9 billion divestment portfolio. Although the sources did not disclose a potential value, PetroRio had previously made an offer of around US$ 500 million for Bauna in 2016, which ultimately was unsuccessful. LCOc1 CLc1 oil prices have risen moderately since then.

The Pampo and Enchova clusters, which are slightly more productive, in the adjacent Campos Basin, being sold together, were considered to be offers of around US$ 1 billion in June.

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Karoon and Petrobras declined to comment. PetroRio did not respond to a request for comment.

One of the sources said that other bidders were involved in the auction that closed at the end of last year, and it was possible that neither PetroRio nor Karoon emerged as the winner of the concession expected to last until 2040. Petrobras could enter into exclusive negotiations with one of the companies within weeks, the sources said.

This is the second time PetroRio and Karoon have attempted to buy Bauna.

Karoon entered into exclusive negotiations in 2016 to purchase Bauna, as well as the Tartaruga Verde field, which recently began producing, although that process was canceled following a court injunction.

At that time, Karoon won the US$ 500 million bid from PetroRio, which was strictly aimed at Bauna.

For PetroRio, the asset fits well with the strategy of the independent oil company to acquire stakes in mature oil fields to increase its productivity.

For Karoon, which stated it remains interested in Bauna, the asset would present significant synergies with the nearby Kangaroo and Echidna oil discoveries.

Petrobras is cutting back its stakes in shallow water and mature fields to refocus its efforts on Brazil’s promising deepwater pre-salt play.

There is some legal uncertainty looming over the divestment of Bauna. In December, a Supreme Court judge suspended asset sales of exploration and production by Petrobras, but the company later stated it believed the decision only applied to proceedings initiated in May or later.