Statoil will triple its output off the coast of Brazil after agreeing to buy a 25% stake in Roncador, one of the country’s largest oil fields, from national oil company Petrobras for up to $2.9 billion.

The deal announced Dec. 18 fits Statoil’s strategy of bolstering its presence in Brazil as it seeks to add new barrels which are becoming more difficult to obtain closer to home on the Norwegian continental shelf.

“This transaction adds material and attractive long-term production to our international portfolio, further strengthening the position of Brazil as a core area for Statoil,” Statoil CEO Eldar Saetre said.

The agreement consists of an initial payment of $2.35 billion plus “additional contingent payments” of up to $550 million, Statoil said in a statement.

Its structure showed Statoil was betting on the increased recovery from the mature field, Sparebank 1 Markets analyst Teodor Sveen-Nilsen said in a note.

“With Statoil’s very strong track record on the Norwegian continental shelf for increasing recovery rates, we believe the outlook for increasing recovery rate for Roncador is good,” he added.

Roncador, Petrobras’ third-largest producing field in the Campos Basin offshore Brazil, is estimated to contain about 10 Bboe in place and more than 1 Bboe in expected remaining recoverable volumes, Statoil said.

The Norwegian company said its ambition was to increase the recovery factor by at least 5 percentage points, bringing the field’s total remaining recoverable volumes to more than 1.5 Bboe.

The production from the field, which started in 1999, stood at about 240,000 bbl/d in November.

After the transaction, Statoil’s output off Brazil will increase to 110,000 boe/d from about 40,000 boe/d, the company said.

Petrobras will continue to operate the field and will hold a 75% stake.

Analyst Anders Holte at Danske Bank said the implied transaction’s valuation stood at $9.4 per barrel, compared with valuations of recent transaction off Norway at average $11 per barrel.

Sparebank’s Sveen-Nilsen said the deal showed Statoil had used an opportunity to make a deal outside Norway as the Norwegian continental shelf assets market was getting “pretty crowded.”

The transaction over Roncador will take effect from Jan. 1. The deal is subject to approval from Brazilian authorities.

—Reuters