BP Wins Brazilian Acreage - Analyst Blog
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.
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 ( DVN ) 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.
BP PLC (BP): Free Stock Analysis Report
DEVON ENERGY (DVN): Free Stock Analysis Report
PETROBRAS-ADR C (PBR): Free Stock Analysis Report
TOTAL FINA SA (TOT): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research