Total, Petrobras Signs Strategic Contracts For Upstream, Downstream Sectors

(RTTNews) - Petrobras Energia Participaciones SA (PZE) and Total SA (TTA.L, TTFNF.PK, TOT) (TOT) Wednesday announced definitive contracts for a strategic alliance, as defined earlier on December 21, 2016. As per the contracts signed on Tuesday, the two companies will create new partnerships in the Upstream and Downstream sectors, together with a reinforced technical cooperation covering operations, research and technology.

Total will pay to Petrobras a global amount of $ 2.225 trillion made of $ 1.675 trillion cash for assets and services, $ 400 million that can be triggered to carry a part of Petrobras's investment share in the Iara development fields and $ 150 million as contingent payments.

Petrobras is an integrated energy company focused on oil and gas, while Total is a global integrated energy producer and provider. This alliance will combine their internationally recognized expertise on all segments of the oil and gas value chain in Brazil and internationally. Petrobras will transfer 22.5 percent of rights to Total in the concession area named Iara in the Block BM-S-11. Petrobras will continue to be operator with a majority interest of 42.5 percent. The partnership with Total will allow Petrobras to reduce its investment and benefit from technological solutions. BG E&P Brasil, a Royal Dutch Shell subsidiary, with 25 percent and Petrogal Brasil, with 10 percent, will also take part in the consortium.

Petrobras will transfer 35 percent of rights to Total, in the Lapa field concession area, in Block BM-S-9 and will also transfer the operatorship to Total whereas Petrobras will remain in the license with 10 percent. The other partners are BG E&P Brasil, a Royal Dutch Shell subsidiary, with 30% and Repsol-Sinopec Brasil with 25 percent.

Further, the companies said, Petrobras will transfer 50 percent interest to Total in Termobahia composed of 2 cogeneration plants, Rômulo de Almeida and Celso Furtado, located in Bahia area.