Brazil’s Petrobras and France’s Total have entered into a strategic alliance for upstream and downstream activities in Brazil, that will expand internationally.
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Image of Pouyanné, from Total. |
Petrobras CEO Pedro Parente and Total Chairman and CEO Patrick Pouyanné signed a memorandum of understanding (MoU) today (24 October), setting out the general framework for the alliance.
Upon the terms of the MoU, the companies will join forces in some key areas of mutual interest and will evaluate opportunities in Brazil and abroad to jointly benefit from their internationally recognized expertise on all segments of the oil and gas value chain, Total said.
The first phase of the agreement will see the companies focus on the upstream portion, in which Petrobras will propose Total to partner in projects in Brazil; and Total will propose Petrobras to partner in opportunities outside of Brazil.
“This new partnership will allow both companies to combine their world class experience and expertise in deepwater development to optimize the production and jointly develop this strategic area of activity in Brazil and in other high potential oil and gas provinces, as well as sharing costs and risks in projects with high investment and complexity,” Total said.
Currently, Petrobras and Total are jointly participating in 15 exploration and production consortiums, nine of which are in Brazil and six abroad.
In Brazil, the companies are partners in the development of the giant Libra area, which is the first production sharing contract in the Brazilian pre-salt in Santos basin. Start-up at the Libra Pilot project is anticipated in 2H 2020, however, to meet this expectation, the Libra consortium needs to hire the FPSO by Q1 2017.Petrobras recently relaunched the FPSO bid process earlier this month.
On 5 October, both chambers of Brazil’s congress voted in favor to allow outside participation in the pre-salt areas of the country.
Outside Brazil, Petrobras and Total are partners on the Chinook field in the US Gulf of Mexico, on the deepwater Akpo field in Nigeria and on the gas fields of San Alberto and San Antonio/Itau in Bolivia, as well as in the Bolivia-Brazil gas pipeline.
As for the rest of the MoU, the first phase also includes developing downstream joint activities in the gas and power generation in Brazil. Cooperation will be extended, in a second phase, to a broader cooperation in Brazil focused on all downstream segments.
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