World Business

Petrobras acquires stakes in Australia

(Xinhua)
Updated: 2010-04-14 15:54

RIO DE JANEIRO: Brazil's state-owned oil and gas giant Petrobras announced late Tuesday that it has acquired 50 percent of participating interest in the exploratory block WA-360-P in the Australian North Carnarvon Basin from MEO Australia Ltd. This was done via its wholly-owned subsidiary Petrobras International Braspetro B.V.(PIB B.V.).

The company informed that participation in the block cost $39 million. The acquisition marks Petrobras' arrival in Oceania, the only continent on which the company did not operate yet.

According to Petrobras, the WA-360-P block covers an area of 1.2 square km, with a water depth of 500 meters, and is located near an area of significant gas discoveries. The concession contract is in the fifth year of the exploratory period. A total of 450 square km of 3D seismic analysis has already been performed, and it indicates high potential for gas discoveries.

The contract, which is still subject to the approval of Australian regulatory authorities, also stipulates that Petrobras will fund 100 percent of the drilling expenses of the first well, Artemis-1, limited to $41 million. The drilling is scheduled for the second half of 2010.

In case of a successful discovery, Petrobras will also pay a bonus of $31.5 million to MEO and will carry MEO's participation (20 percent) of the cost to drill two additional wells, capped at $62 million per well.

MEO will remain the operator of the block, and the Australian companies Cue Exploration Pty Ltd and Moby Oil & Gas Ltd will keep their interest, which is 15 percent for each company. Petrobras has the option of becoming the operator after the completion of the first well.