CNOOC, CNPC in Brazil’s oil deal
Print Edition
A multinational consortium which includes China’s CNOOC Ltd and CNPC has been awarded a 35-year contract to develop Brazil’s biggest-ever oil discovery.
China National Offshore Oil Corp, the country’s dominant offshore oil producer, and China National Petroleum Corp each holds 10 percent in the consortium, the sole bidder at the auction. Brazilian state oil company Petrobras has 40 percent while European majors Royal Dutch Shell Plc and Total SA take 20 percent each.
Petroleo Brasileiro SA, as Petrobras is known, will be the operator of the Libra field that lies under a thick layer of salt beneath Atlantic waters, about 170 kilometers off the coast of Rio de Janeiro.
The Brazilian oil regulator, Agencia Nacional do Petroleo (ANP), estimates that Libra holds up to 12 billion barrels of recoverable oil, about three years of China’s consumption, and may need a US$185 billion investment over the 35-year concession.
The consortium would give 41.65 percent of the crude produced from Libra to the Brazilian government, the minimum amount set before the auction. It has also to pay 15 billion reais (US$6.9 billion) as a signing bonus to complete the deal. These rules offered little room for profit and may explain why many foreign oil majors and investors stayed away.
CNOOC CEO Li Fanrong said the company’s participation “aligns with our philosophy of seeking partnerships to expand our global footprint.”
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