Brazil: Petrobras & Murphy Sign Definitive Agreement

Brazil: Petrobras & Murphy Sign Definitive Agreement

Petrobras America Inc. (PAI) and Murphy Exploration & Production Company – USA, has signed a definitive agreement to form a joint venture company (JV) which comprises of producing oil and gas assets in the Gulf of Mexico.

PAI is a subsidiary of Petrobras while Murphy is a wholly owned subsidiary of Murphy Oil Corporation.

The contribution by both companies of their current producing Gulf of Mexico assets, will form the establishment of the JV, with Murphy overseeing the operations with 80% interest and PAI with 20%.In the fourth quarter 2018, the JV will have an estimated average production of approximately 75 thousand barrels of oil equivalent per day, and will comprise the assets of Deepwater fields and Shallow water fields.

A total amount of up to US$ 1.1 billion involves the transaction which will be received by PAI, with a cash compensation of US$ 900 million which corresponds to the difference in value between the assets contributed by both companies at the close of the transaction, in addition to contingent payments up to US$ 150 million to be made until 2025.if certain enhanced oil recovery projects are undertaken, Murphy, from 2019 will carry investments of up to US$ 50 million of PAI costs for production development in the St. Malao field.

Corresponding to its 2018-2022 Business management Plan, the JV represents an important step for Petrobras, allowing, in addition to cash inflow, the sharing of investment. This results in a final portfolio with a better of risk-return through new business model in the US with a partner with experience in the region and recognized for its operational and safety expertise, cost discipline and technical qualification.

Expected to close this year, the conclusion of the transaction is subject to the fulfillment of precedent conditions such as obtaining the applicable US government approvals. PWKD121022018

Last modified onThursday, 11 October 2018 20:33
Login to post comments
back to top

Main Menu

News Menu