Petrobras to swap oil reserves for equivalent reserves of US companies

Jul 20, 2000 02:00 AM

Petrobras will swap some of its oil reserves for equivalent reserves of US companies in the Gulf of Mexico, Carlos Alberto Pereira de Oliveira, Petrobras' production superintendent, told. He expects the negotiations, which are very advanced, to be concluded in mid-August. Oliveira noted that the company sent invitation letters to 15 US companies that drill for oil in the Gulf of Mexico. Negotiations started two months ago, according to Oliveira.
Petrobras will offer 40 % of the reserves from the Albacora Leste field, in the Campos basin, for equivalent reserves in the Gulf of Mexico. The company will include other Brazilian oil reserves in the negotiation. "It is necessary to increase Petrobras' reserves in countries such as the US," Oliveira said.

Braspetro, Petrobras' international arm, produces 18,000 bpd in 60 blocks in the Gulf of Mexico, and wants to increase its presence there. Braspetro's strategy focuses on three regions, South America, West Africa and the Gulf of Mexico. In South America, Braspetro operates mainly in Colombia and Bolivia, where it owns refineries and from where it imports natural gas through the Bolivia-Brazil gas pipeline. The gas will be used for the government's program to build gas-fuelled thermoelectric plants.
In Angola, Braspetro produces 19,000 bpd of oil equivalent, and in Nigeria it has a 20 % stake in the Abgami field. The Albacora Leste field reserves have approximately 700 mm barrels of oil and gas, of which 15 % are part of negotiations currently taking place with Spain's Repsol-YPF. These negotiations include refining and distribution of oil products in Spain and in Brazil.
The draft agreement proposes ownership of EG3, a subsidiary of Repsol-YPF in Argentina, by Petrobras. EG3 has 630 resale outlets and a refinery in Baia Blanca and has a 12 % stake in Argentina's oil products distribution market. Repsol-YPF would, in exchange, own Petrobras' 400 gas stations in the southern region of Brazil. The deal also proposes that Repsol-YPF will have a 30 % stake in the Petrobras' refinery Alberto Pasqualini (REFAP), in the southernmost state of Rio Grande do Sul.

Argentina's government approved the Repsol acquisition of YPF, in July, 1999, after Repsol committed to sell 11 % in YPF, which currently controls 60 % of Argentina's oil products market. Argentina's government set a December, 2000 deadline for Repsol to sell 11 % in YPF. Analysts said the agreement with Brazil is highly advantageous for Repsol-YPF because the Brazilian oil product market is three times larger than Argentina's.

Source: Bridge News via Newspage