The U.K. supermajor
) along with its partners
Petroleo Brasileiro S.A.
, or Petrobras (
) and Petrogal have emerged as winning bidders for the deepwater
acreage in Brazil's National Petroleum Agency's (ANP) eleventh
bidding round. This represents the first bidding round held since
Dec 2008 and the first under Brazil's new petroleum law.
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BP and partners will explore for oil and gas in eight deepwater
blocks including FZA-M-57, FZA-M-59, FZA-M-86, FZA-M-88,
FZA-M-125, and FAZ-M-127 in the Foz do Amazonas basin, BAR-M-346
in the Barreirinhas basin, and POT-M-764 in the Potiguar basin.
Under the Brazilian concession regime, the companies will have
the legal right to develop any commercial discovery.
BP will operate block FZA-M-59 with a 70% stake and block
BAR-M-346 with a 50% stake. The next step of BP and its partners
involves working with ANP to finalize the awards. The signing of
the contracts is scheduled for Aug 2013.
The contract award follows BP's re-entry into Brazil's upstream
market in 2011 with its purchase of interests from
Devon Energy Corporation
) and acquisition of interests in four Petrobras-operated
deepwater blocks in Brazil's equatorial belt in 2012.
Winning these blocks will help BP in achieving its strategy of
optimizing its global portfolio and repositioning itself for
long-term growth. The energy giant has created a large portfolio
of upstream interests in Brazil over the last two years.
Currently, the company is aggressively pursuing exploration in
this new acreage that presents significant upside potential over
the long term.
BP's presence in Brazil dates back to 1957. The oil giant has
significant business interests in the region even after the sale.
It operates in Brazil through four businesses - exploration and
production (BP Energy do Brasil), biofuels (BP Biocombustíveis),
aviation fuel (Air BP) and lubricants (Castrol).
BP carries a Zacks Rank #3 (Hold), which is equivalent to a
short-term Hold rating.