Statoil Brasil Oleo e Gas, a subsidiary of Statoil; ExxonMobil Exploracao Brasil, a subsidiary of ExxonMobil; and Petrogal Brasil, a subsidiary of Galp, were the high bidders for a production-sharing contract for the Carcará North block in Brazil’s second pre-salt offshore licensing round, held on 27 October.
The consortium comprising Statoil (operator, 40%), ExxonMobil (40%) and Galp (20%) presented the winning bid (67.12% of profit oil) for the Carcará North block in the Santos basin. The pre-determined signature bonus to be paid by the consortium is approximately $910 million (BRL 3 billion). Statoil’s share is $364 million.
Statoil, ExxonMobil and Galp have also agreed to a number of subsequent transactions in the adjacent BM-S-8 block to align equity interests across the two blocks that together comprise the Carcará oil discovery. The aggregate total potential consideration to be received by Statoil in these transactions is around $1.55 billion and, following the licensing round, the potential net cash inflow to Statoil is around $1.19 billion.
First, Statoil has agreed to divest 33% out of its current 66% interest in BM-S-8 to ExxonMobil for a total potential consideration of around $1.3 billion, comprising an upfront cash payment of around $800 million and a contingent cash payment of around $500 million.
Furthermore, upon the future closing of its acquisition of the 10% interest in BM-S-8 held by Queiroz Galvão Exploração e Produção (QGEP), Statoil has agreed to divest a further 3.5% to ExxonMobil and 3% to Galp for a total consideration of around $250 million, comprising an upfront cash payment of around $155 million and a contingent cash payment of around $95 million.
As a result, both Statoil and ExxonMobil will have a 36.5% interest in BM-S-8 and a 40% interest in Carcará North. Galp will have 17% in BM-S-8 and 20% in Carcará North.
The partners in Carcará North have also agreed that Statoil will be operator for the unitized field development, subject to government approval.
“This further strengthens Statoil’s presence in the prolific Brazilian pre-salt area, and these transactions help build a strong and aligned partnership across the two Carcará blocks,” Statoil CEO Eldar Saetre said. “Together, they significantly advance our strategy in Brazil, a core area for Statoil. Developing a world-class asset like Carcará as operator is a good match with our competence and capacity.”
“We look forward to working with our partners, the Brazilian authorities and Pré-Sal Petróleo on a timely unitization process in support of our plan for first oil production from Carcará in the mid-2020s,” said Statoil’s Country Manager for Brazil, Anders Opedal. “This plan will create jobs, economic growth and revenues to the state.”
The closing of the transactions with ExxonMobil and Galp is subject to customary conditions, including partner and government approvals.