TNK-BP to become partner with Brazil’s HRT

Sep 28, 2011 12:00 AM

NK-BP, Russia's third-largest oil producer, signed a contract to pay about $ 1 bn to become a partner with Brazil's HRT Participacoes em Petroleo in an oil project in the Brazilian Amazon, an official at TNK-BP said.
The transaction with HRT will be completed soon and HRT will remain the operator, said Sergey Funygin, head of TNK-BP's Venezuela division, at an oil conference in Puerto la Cruz, Venezuela. The deal will give TNK-BP a 45 % stake in exploration blocks in the SolimoesBasin where HRT recently found signs of oil, he said.

The companies signed a “definitive agreement” for TNK-BP to join the project, Funygin said. HRT will be the operator for at least two years and the companies have the option to change the agreements' conditions, he said.
TNK-BP is looking for opportunities in Brazil, Africa, the Middle East and Latin America to diversify operations, Funygin said.

Brazil expects to more than double oil production over the next 10 years as it develops the largest discoveries in the Americas in more than three decades.
TNK-BP is buying the stake from Petra Energia SA, HRT's original partner in the blocks, through an arrangement where HRT has rights to buy Petra's stake.

Venezuela expansion
TNK-BP, which has stakes in four joint ventures with Petroleos de Venezuela, is looking to produce more oil in the South American country and may increase its interests in current ventures or buy new assets, said Funygin. The Russian company has a 16.7 % interest in the Petromonagas heavy crude venture that was nationalized from ExxonMobil in 2007.
Exxon is currently pursuing arbitration with PdVSA, as the Caracas-based company is called, and seeking around $ 7 bn in compensation in the venture formally known as Cerro Negro.

“We're waiting for the issue to be resolved with ExxonMobil, and then we are willing, if the Venezuelan government and PdVSA consider us, to increase our interest in the venture,” said Funygin.
“We've already told PdVSA that we are ready to sit down and talk about it.”

TNK-BP's share of production from its joint ventures in Venezuela is around 25,000 barrels of oil a day, said Funygin.
Petromonagas, which upgrades about 120,000 bpd of heavy crude, will be stopped for a month next year in March or April for programmed maintenance, Funygin said.

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