Petronas to acquire stake in OGX Brazil offshore blocks for 850 mln
KUALA LUMPUR/RIO DE JANEIRO: Malaysian state oil firm Petroliam Nasional Bhd agreed on Wednesday to pay 850 million for a 40 percent stake in a Brazilian offshore oil field controlled by Brazil’s OGX Petroleo e Gas SA.
The deal will be Petronas’s first foray into one of the world’s largest hydrocarbon reserves, with 145 billion barrels of oil reserves, as oil and gas production back home slows.
Petronas said it will take up the interest in Blocks BM-C-39 and BM-C-40, located in shallow waters 95 km (59 miles) offshore Rio de Janeiro state and containing the Tubarao Martelo field, which is currently under development.
“Petronas views the acquisition as a highly attractive opportunity in terms of asset quality and for strategic quality growth in Brazil,” it said in a statement.
Bank of America Merrill Lynch advised Petronas on the acquisition.
Petronas is looking to make other acquisitions in the South American country. It’s exploration arm Carigali has qualified to bid for exploration blocks at an auction in Brazil on May 14 and 15, the first such sale in four years.
Petronas latest purchase, signed on May 7, will provide much needed cash for Rio de Janeiro-based OGX, which was founded in 2007 by Brazilian billionaire Eike Batista.
A rapid exploration programme and a series of promising offshore discoveries by OGX and other Brazilian oil companies sent OGX shares surging.
But when it produced its first oil from its Tubarao Azul or “Blue Shark” field in 2012, output was disappointing. Flows were well below those expected by Batista and other executives and the shares plunged.
The shares have fallen 55 percent so far this year and nearly 90 percent since it started output in early 2012.
Investors are concerned that the cash flow from oil will be insufficient to build platforms and production systems to develop existing discoveries and pay for debt and future exploration.-- REUTERS