Total and Petrobras took their relationship to the next level Dec. 21 with a $2.2 billion deal that gives the French company a stake in two presalt fields as the financially struggling Brazilian deepwater leader  moves closer to its asset sale target.

The assets package gives Total 22.5% interest in the Iara Field and 35% interest in—plus operatorship of—the Lapa Field, both in the prolific Santos Basin offshore Brazil.  The Iara Field is still in the development phase; however, the Lapa Field recently began oil and gas production through the FPSO Cidade de Caraguatatuba.

The agreement also gives Total regasification capacity in the Bahia LNG terminal and a 50% interest in two Bahia area co-generation plants with pipeline transport capacity, the company said.

Analysts see the move, which follows the two companies’ formation of a strategic alliance in October, as a positive.

“We think this is a logical deal for Total, which in our view has a limited set of long-term project development options and makes Brazil the key area for long-term upstream oil growth,” Tudor, Pickering, Holt & Co. said in a Dec. 22 note.

The analyst pointed out that Total is getting about 160 million barrels of oil equivalent (MMboe) net reserves and about 35 Mbbl/d of plateau production at the Lapa Field, which it estimates is worth about $1.5 billion, or $9/boe, at $65/bbl in the long term. The value of the acquired gas assets was put at about $200 million.

“This implies that Total is only paying a minimal amount for its stake in the under-development Iara Field, especially as the carry is reimbursable,” TPH said. “This is reasonable given the lower reservoir quality of Iara.”

The deepwater Iara, which is comprised of the Berbigao, Sururu, and Oeste de Atapu accumulations in the Transfer of Rights area, was declared commercial in 2014 and is estimated to hold between 3 Bbbl  and 4 Bbbl of oil, according to estimates by Petrobras, which maintains operatorship and keeps a 42.5% interest in the field.

 Iara was described as complex.

“The partnership with Total in this area will bring benefits, such as the release of investments and new technological solutions for its development, maximizing profitability and the volume of oil to be recovered,” Petrobras said in a statement.  Other partners in the Iara concession are Royal Dutch Shell Plc (NYSE: RDS.A) with 25% interest, and Galp, with 10%.

The Lapa Field, in which Petrobras will have a 10% stake with partners BG E&P Brasil (30%)—a Shell subsidiary—and Repsol Sinopec Brasil (25%), is the third presalt field Petrobras has brought into production this year, contributing to the more than 1.2 MMbbl/d flowing from Petrobras’ presalt assets.

The Cidade de Caraguatatuba is capable of processing up to 100 Mbbl/d of oil and compressing 5 million cubic meters per day of gas.

“The two companies will combine their internationally recognized expertise in deepwater to jointly develop solutions for long subsea tiebacks, reservoirs with high CO2 content and digital geosciences data management,” Total said in a statement.

The technological partnerships will also rely on 4-D seismic and geomechanical studies in an effort to lower risks and increase the chances of success, Petrobras said.

Also, as part of the agreement announced Dec. 21, Petrobras has the option of acquiring a 20% stake in the Perdido Belt deepwater exploration Block 2, which was recently awarded in Mexico to Total and partner ExxonMobil Corp (NYSE: XOM).

Petrobras will receive $1.6 billion in cash in 60 dayswhen the agreement closes, CFO Ivan Monteiro said in a press briefing. The rest will be received over time.

With the agreement, the total divestment for the last two years ending in 2016 reached $13 billion, Monteiro said, still $2 billion short of the target the company set to reduce its $125 billion debt, the largest in the world's oil industry.

Petrobras CEO Pedro Parente said the remaining $2 billion may have to be added to the company’s 2017 asset sale target.

The deal is in sync will Total’s new, “more aggressive business development” strategy that followed cuts to help lower cash flow breakevens, Wood Mackenzie’s Valentina Kretzschmar said in a statement. 

“A rebound in oil prices, combined with a new phase of strong cash flow growth, will fuel Total’s new business development opportunities,” said Kretzschmar, corporate research director for Wood Mackenzie. “Presalt deepwater Brazil offers access to low-cost, long-life resources, and will help shift Total's portfolio to the lower end of the cost curve — in line with the company's strategy.”

The agreement comes more than two months after Brazilian legislators agreed to allow foreign oil companies to operate bocks in the presalt.

Velda Addison can be reached at vaddison@hartenergy.com. Reuters contributed to this article.