Petro Rio Acquires BP's Campos Basin Interests
Petro Rio SA has entered into an agreement with a wholly-owned subsidiary of BP Plc to acquire its 35.7% operated interest in the BM-C-30 concession (containing the Wahoo field) and a 60% operated interest in the BM-C-32 concession (Itaipu Field) located in the Campos basin, offshore Brazil, for US$100 million.
Under the terms of the agreement, Petro Rio will acquire BP’s interests in the concessions for a total consideration of US$100 million, split into five installments. The first three installments of US$17.5 million each will be split between the signing and completion of the transaction, closing, and upon satisfaction of customary closing conditions. A further US$15.0 million will be payable in December 2021, with the remaining US$32.5 million being paid in 2022. In addition, BP will also be entitled to an earn-out of US$40 million, contingent on the Itaipu field’s unitization, or first oil.
BM-C-30 and BM-C-32 are located in the North Campos basin, off the coast of Rio de Janeiro, in a water depth of 1,400 m. The concessions were awarded in 2004 as part of Brazil’s 6th Bidding Round.
BM-C-30 contains the Wahoo field, which was discovered in 2009 and includes five exploration wells drilled between 2008 and 2013. The concession is estimated to contain a production potential of over 140 million barrels of oil (MMbbls), with estimated average initial productivity of over 10,000 barrels of oil per day (bbls/d) per well. The Wahoo development program includes the drilling of four producer wells, two injector wells, and the deployment of a subsea manifold with multiphase pumps for the flow of oil and injected water. Associated gas produced from the field will be used to generate energy for the Frade FPSO. Other partners in the concession include French energy major TOTAL SA and IBV Brasil Petroleo Ltda, a 50:50 joint venture between India’s Bharat PetroResources Ltd. and Videocon Energy Brazil Ltd.
BM-C-32 contains the Itaipu field, which was discovered in 2009 and includes three pilot wells drilled and located close to the Whales Park cluster. Preliminary studies on the field indicated a potentially shared accretion with the southeast portion of the Whales Park Cluster and hence, the field development may go through a unitization process. The work program for the concession includes finalizing appraisal plans and assessing alternative development concepts. The remaining 40% interest is held by a subsidiary of TOTAL.
Listed on the Brazilian B3 Exchange, Petro Rio is currently focused on offshore production operations in the Campos basin (Polvo and Frade fields) and the Camamu-Almada basin (Manati field). The company also holds interests in exploration licenses in the Foz do Amazonas basin.
“With this acquisition, PetroRio makes another important strategic move, which once again highlights its business model (already established in other countries), which includes the creation of production clusters through tiebacks, fields redevelopment and operational optimization, within the highest efficiency and safety levels,” Petro Rio said in a statement.
Scotiabank is advising Petro Rio on the deal.
The completion of the transaction is subject to customary closing conditions, including the receipt of necessary regulatory approvals.