Petrobras, Total advance in new strategic partnership deals

RIO DE JANEIRO -- Agreement signed involves the sale of Petrobras' stake in the Lapa field and joint venture formation for onshore solar and wind projects in Brazil.

Petrobras and the French company Total signed new documents related to the strategic partnership between the two announced in March 2017. The following agreements were signed:

• Assignment of 10% rights of Petrobras to Total of the field of Lapa, in Block BM-S-9. Petrobras is exercising the option to sell the remainder of its interest, as stipulated in the agreement signed in January 2018, when Total acquired a 35% interest in Petrobras, resulting in the operation of the field. The current production of the field of Lapa is about 30,000 bpd. The new composition of the consortium will be: Total as operator (45%), BG E&P Brasil - subsidiary company of Royal Dutch Shell plc (30%) and RepsolSinopec Brasil (25%).

• Investment agreement for the creation of a joint venture with 49% of Petrobras and 51% of Total Eren SA - a related company of Total, with the objective of developing projects in the solar and onshore wind energy segments in Brazil. Initially, the joint venture will seek to develop a portfolio of projects of up to 500MW of installed capacity over five years. This agreement is a continuation of the memorandum of understanding signed in July 2018 and is binding in nature, whereby the parties undertake to negotiate the documents necessary for the formalization of the joint venture. The signing of the agreement is yet another step in Petrobras' strategy to develop high-value renewable energy businesses with global partners to transition to a low carbon matrix.

In this new phase, Total will pay Petrobras an additional amount of $50 million, without considering the adjustments due upon the closing of the transaction.

Strategic partnership

In the scope of this partnership, the companies had already carried out transactions that resulted in the payment of $1.95 billion to Petrobras in January 2018, in addition to a $400-million credit line, which may be launched by Petrobras to carry out part of its investments in the Iara area fields, and contingent payments in the amount of $150 million.

With regard to the technological cooperation agreements that are part of the partnership, results have already been achieved on two fronts:

• Artificial intelligence: new techniques to identify geological faults, leading to significant gains in efficiency.

• Low permeability reservoirs: new processes and tools to locate areas with greater potential, with direct application in fields such as Sururu (concession in the area of ​​Iara).