France’s Total and Brazil’s Petrobras have signed definitive contracts in relation to the package of assets contemplated in the Strategic Alliance announced on the 21st of December last year.
The final contracts signed yesterday seal the Strategic Alliance between the two companies creating new partnerships in the Upstream and Downstream sectors, together with a reinforced technical cooperation covering operations, research and technology.
Pouyanné, Chairman and CEO of Total, stated: “We are delighted today to see our Strategic Alliance becoming reality. These new partnerships together with a reinforced technological cooperation should create significant synergies and values, mutualising our operational excellence and further reducing costs on our joint projects for the benefit of both companies”.
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.
For Total, these new partnerships with Petrobras reinforce Total’s position in Brazil through access to new fields in the Santos Basin while entering the promising gas value chain.
Under the final contract, Petrobras will transfer 22.5 per cent of rights to Total in the concession area named Iara (comprising the Sururu, Berbigão and Oeste de Atapu fields which are under unitisation with the Entorno de Iara, a transfer of rights area in which Petrobras holds 100 per cent interest) in the Block BM-S-11.
Petrobras will also transfer 35 per cent of rights to Total, in the Lapa field concession area, in Block BM-S-9 and will also transfer the operatorship to Total whereas Petrobras will remain in the license with 10 per cent. The Lapa field has been put in production in December 2016.
Finally, Brazil’s national oil company will hand over 50 per cent interest to Total in Termobahia composed of 2 cogeneration plants, Rômulo de Almeida and Celso Furtado, located in Bahia area. The two plants are connected to the regasification terminal located in São Francisco do Conde, also in Bahia where Total will take regasification capacity to supply gas to the power plants.
The final contracts are subject to approvals by the relevant regulatory entities, potential exercise of preemptive rights by current Iara partners in addition to other preceding conditions.