CNOOC purchases additional 5% stake in Buzios de Petrobras (PBR) oil field – October 1, 2021

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Petroleo Brasileiro SA Where Petrobras (PBR Free Report) recently stated in a securities filing that CNOOC Limited (CEO Free Report) is interested in paying him $ 2.08 billion for an additional 5% stake in the huge Buzios pre-salt field in the Santos Basin. Given this development, the Brazilian state oil company does not foresee any impact on its production target for 2021 until the deal is finalized.

The effectiveness of the agreement depends on approvals from the Administrative Council for Economic Defense, the National Petroleum, Natural Gas and Biofuels Agency, and the Ministry of Mines and Energy.

The move comes well over three months after Rio de Janeiro-based Petrobras signed the Buzios joint venture agreement with Présal Petróleo SA (PPSA) and its Chinese partners CNODC Brasil Petróleo e Gás Ltda. (CNODC) and CNOOC, which will control the coexistence of the Rights Transfer Agreement (TOR) and the Production Sharing Contract for excess oil found in the Buzios field off Brazil.

As part of the deal, Chinese state-owned companies CNOOC and CNODC paid Petrobras $ 2.94 billion for past development spending on the Buzios pre-salt field, allaying investor concerns ahead of another sale to pre-salt auction in December 2021. Petrobras controls 92.666% of the Buzios reservoir. while the remaining 3.667% each belongs to other partners.

In the November-2019 auction, Petrobras won 90% of the exploration and production rights of the excess volume of the transfer of rights to the Buzios field. The residual stake of 10% was divided equally between CNOOC and CNODC with the possibility of increasing it subsequently. The three companies paid $ 17.1 billion for the right to produce more than the 3.15 billion barrels of oil equivalent that Petrobras had originally agreed to produce.

Company Profile

Petrobras is Brazil’s largest integrated energy company and one of the largest in Latin America. The activities of the company include the exploration, exploitation and production of petroleum from reservoir wells, shale and other rocks, as well as the refining, processing, trading and transportation of petroleum and petroleum products, natural gas and other fluid hydrocarbons in addition to other energy-related activities.

Zacks rank and choice of keys

Petrobras currently has a Zacks Rank # 3 (Hold). Some higher ranked players in the energy sector are Continental Resources, Inc. (CLR Free report) and Magnolia Oil and Gas Company (MGY Free Report), each currently displaying a Rank 1 of Zacks (strong buy). You can see The full list of today’s Zacks # 1 Rank stocks here.

Continental Resources earnings have beaten Zacks’ consensus estimate in three of the previous four quarters while missing the same on one occasion.

Magnolia’s earnings have beaten Zacks’ consensus estimate for the past four quarters.


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