Brazil: Petrobras, Total seal strategic alliance

The contracts signed yesterday seal the Strategic Alliance between Petrobras and Total creating new partnerships in the Upstream and Downstream sectors, together with a reinforced technical cooperation covering operations, research and technology.

This alliance should allow both companies to combine their internationally recognized expertise on all segments of the oil and gas value chain in Brazil and internationally, according to a company release.

 “hese new partnerships together with a reinforced technological cooperation should create significant synergies and values, mutualizing our operational excellence and further reducing costs on our joint projects for the benefit of both companies,” said Pedro Parente, CEO of Petrobras and Patrick Pouyanné, Chairman and CEO of Total.

Through this transaction, Total will pay to Petrobras a global amount of US$ 2,225 billion made of US$ 1,675 billion cash for assets and services, US$ 400 million that can be triggered to carry a part of Petrobras’s investment share in the Iara development fields and US$ 150 million as contingent payments.

As part of the strategic alliance, Petrobras will transfer 22.5% of rights to Total in the fields belonging to the area named Iara. The Brazilian company will continue to be operator with a majority interest of 42.5%.

In the Lapa field concession area, in Block BM-S-9, Petrobras will transfer 35% of rights and the operationship to Total, but will remain in the license with 10%. Finally, Petrobras will transfer 50% interest to Total in Termobahia composed of 2 cogeneration plants.