Karavan Oil & Gas and Seacrest Acquire the Cricaré Cluster, Onshore Brazil
Brazil’s national oil company, Petroleo Brasileiro SA (Petrobras) has signed an agreement with Karavan Oil & Gas Participações e Consultoria Ltda. and Seacrest Capital Group Ltd., for the sale of its 100% interest in 27 onshore E&P concessions, jointly denominated as the Cricaré Cluster, for a total consideration of US$155 million.
The concessions will be acquired through a specific purpose entity (SPE) Karavan SPE Cricaré SA, in which Karavan Oil & Gas holds a 51% equity interest and Seacrest holds the remaining 49% interest.
Under the terms of the agreement, the total transaction value of US$155 million includes an initial consideration of US$11 million payable upon signing of the agreement, an additional consideration of US$26 million to be paid upon closing the transaction, and a further US$118 million in contingent payments. Petrobras initiated a sales process to divest its entire operated interest in the 27 concessions in May 2019.
The Cricaré Cluster is located in the Espírito Santo basin, in the municipalities of São Mateus, Jaguaré, Linhares and Conceição da Barra. The concessions had an average daily production of approximately 1,782 barrels of oil equivalent per day (boe/d) during H1-2020, of which approximately 95% was oil. The fields in the cluster include access to treatment facilities and to the North Capixaba terminal (TNC) via pipeline for the production outflow.
Privately-held E&P company Karavan Oil & Gas is focused on the acquisition, operation, revitalization, and optimization of mature onshore and shallow-water fields in Brazil.
Hamilton, Bermuda-based Seacrest invests in the global offshore oil & gas industry. The company has founded and invested in several operating companies including AziNor Catalyst Ltd., Fortis Petroleum Norway AS, and OKEA ASA.
State-owned Petrobras has announced several asset sales in recent years as part of a privatization plan they commenced in 2015, following a major corruption scandal that involved allegations against several company officials for paying bribes and accepting kickbacks. The company is also affected by depressed domestic demand in Brazil due to a high number of Covid-19 cases. Brazil currently has the second-highest number of infections.
The transaction is subject to the fulfillment of various conditions precedent, including approval by the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP), Brazil’s oil industry regulator.