Petrobras and Total move forward with their strategic alliance

Entering strategic partnerships is an important part of Petrobras’ 2017-2021 Business and Management Plan, as it contributes to mitigating risks, strengthening corporate governance and sharing information, experiences and technologies, in addition to improving the company’s financial viability through cash inflows and the release of investments. 

Petrobras and Total have strong similarities in the upstream segment, sharing a relevant common base of E&P assets and the search for technological development in similar themes.

The companies jointly participate in 19 consortiums worldwide in exploration and production in key projects such as the Libra area, which is the first production sharing contract in the Brazilian pre-salt in Santos Basin, besides exploration areas in Equatorial Margin, Espírito Santo Basin and Pelotas Basin. In addition, both companies are partners in the Brazil-Bolívia gas pipeline. 

With this new agreement, both companies will strongly reinforce their technological co-operation in the areas of geoscience, subsea systems and joint studies in areas of mutual interest, aiming to reduce investment risks and increase the probability of exploratory success over the next years. The companies will also become partners in the Iara and Lapa fields, in the pre-salt Santos Basin, and in two thermal plants, sharing the use of the regasification terminal infrastructure in the state of Bahia.

The companies also undertake to expand their joint activities outside Brazil, with Petrobras having the option of taking a stake in the Perdido Foldbelt area in the Mexican portion of the Gulf of Mexico.

The transaction has a global estimated value of USD2.2bn including cash, contingent payments and the carry of investments in production development of common assets to both companies, to be paid by Total to Petrobras and its subsidiaries as appropriate. 

The signing of the relevant Sale and Purchase Agreements related to the assets from this Master Agreement is subject to internal and external control and regulatory approvals, including the Brazilian Federal Accounting Court, potential pre-emptive rights from the current partners of Iara, plus other precedent conditions. The companies have a mutual commitment to make all the necessary efforts to sign all contracts within 60 days. 

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