Petrobras Gets Approval From CADE and Acquires Total’s Stake in 5 Oil Blocks in Amazonas

Geologists Claim That Blocks Purchased by Petrobras in the Amazon May Contain More Oil Than Proven Reserves in the Gulf of Mexico

The competition defense agency Cade authorized the Brazilian oil company Petrobras to acquire all of the French Total’s interests in five oil and gas exploration blocks at the mouth of the Amazon. Good news for Brazil’s shipbuilding, the FPSO Carioca leased by Petrobras and operated by Modec arrives this week at the Brasfels shipyard for integration

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The agreement occurred after Total announced in September 2020 its withdrawal from the assets due to difficulties in obtaining environmental licenses, as the mouth of the Amazon is considered environmentally sensitive due to a large coral reef discovered nearby.

In addition to Total, Petrobras also has British BP as a partner in the oil blocks. Petrobras already owned 30% of the blocks, and with the agreement approved by Cade, the state-owned company will increase its stake in the blocks to 70%, while BP will retain 30% and Total will exit the asset.

The transaction received unrestricted approval from Cade, according to a publication in the Official Gazette of the Union last Tuesday (03/02)

“Total and Petrobras agreed that, as a condition for the completion of the transfer, Total will deposit into Petrobras’s account the equivalent value of 40% of the units of work not performed by the closing date of the operation, plus the amounts attributable to the relevant taxes (PIS-Cofins), which will be due by Petrobras,” explained Cade in a statement.

The Blocks Purchased by Petrobras in the Amazon May Contain More Oil Than Proven Reserves in the Gulf of Mexico

When Total announced its interest in leaving the blocks at the mouth of the Amazon, Petrobras stated that the region is a “high-potential exploratory frontier” and that it would take the slice of the company if BP had no interest.

Geologists claim that the area may hold up to 14 billion barrels of oil, more than the proven reserves of the Gulf of Mexico.

But environmentalists have been trying to prevent oil exploration in the mouth of the Amazon since a coral reef was discovered nearby, which has already led the environmental organization Greenpeace to protest against companies’ activities in the area.

The blocks FZA-M-57, FZA-M-86, FZA-M-88, FZA-M-125, and FZA-M-127 at the mouth of the Amazon are still in the exploratory phase, and it is not possible to estimate whether the activities will result in the discovery of oil and gas in volumes that justify investments in development and production.