On Feb. 28, Petrobras and Total announced they had signed a strategic alliance agreement. This new business partnership aims to invest $2.2 billion over the next five years in areas that include operations, research and technology and transfers of assets. Through this agreement, Total obtained interests in two presalt licenses in the Santos Basin’s Iara and Lapa fields from Petrobras. The agreement followed the signing of a memorandum of understanding in October 2016.
Total E&P Brazil General Director Maxime Rabilloud believes that this partnership matches the French oil major’s expansion ambitions.
“Total has a long-term plan in Brazil. We want to expand our business in the country,” Rabilloud told Hart Energy. “Brazil’s oil sector has become a key region for Total’s global growth strategies, once the presalt layer offers huge resources and its productivity is lowering the unit costs.
Currently, the French oil company, which is ranked by Forbes as the world’s 10th-largest oil producer, produces roughly 2.4 million barrels of oil per day (MMbbl/d). Total has not yet started production in Brazil.
According to the agreement, Petrobras will transfer to Total 22.5% of its interests in the Iara concession.
As for the Lapa Field, which began production in December, Petrobras will transfer to Total 35% of its rights in Block BM-S-9. Total will also gained operatorship of the field. Petrobras will retain a 10% stake. The other partners are BG E&P Brasil, a Royal Dutch Shell subsidiary, with 30% interest, and Repsol-Sinopec Brasil, with 25%.
Rabilloud also emphasized that this alliance will facilitate the exchange of information on technology.
“We are going to develop subsea solutions, work to solve problems in reservoirs with high CO2 levels, as well as manage geoscience data,” he added. “This alliance is a strong leverage to potentially increasing further partnerships.”
Assets In Brazil
Besides the Iara and Lapa fields, Total Brazil has an extensive E&P portfolio in Brazil with 17 exploratory areas. The Libra presalt field, which has estimated reserves of between 8 Bbbl and 12 Bbbl of recoverable oil, is one of them.
Total holds 20% in the consortium, with Petrobras at 40% as operator, while Shell holds 20% with CNPC and CNOOC each holding 10%. Since starting operations in 2014, the operator has drilled nine wells during the appraisal campaign, and the first Libra FPSO unit is under customization in Singapore’s Jurong Shipyard. The vessel will have the capacity to process up to 50 Mbbl/d of oil and to inject up to 4 million cubic meters per day of gas.
Rabilloud also said that Total’s other Brazilian assets are very promising, including five blocks in Foz do Amazonas Basin and Xerelete Field in the Campos Basin.
In Foz do Amazonas, Total operates in five blocks (FZA-M-57, FZA-M-86, FZA-M-88, FZA-M-125 and FZA-M-127) with Petrobras and BP. Drilling activities are scheduled to start this year. Recently, Brazil’s oil regulator, ANP, approved the schedule extension for Total to finish the first drilling phase by 2020.
Holding a 70% stake, the Xerelete Field was the first field in Brazil to be operated by Total. BP is a partner with a 30% stake. At present, the project is in the production costs optimization phase. Presentation of the development plan has been postponed to 2018.