Bloomberg News

TNK-BP Says It Paid $1 Billion to Partner With HRT in Amazon

September 28, 2011

(Updates with TNK-BP comment in third paragraph and comment on Venezuela expansion plans in seventh paragraph.)

Sept. 28 (Bloomberg) -- TNK-BP, Russia’s third-largest oil producer, signed a contract to pay about $1 billion to become a partner with Brazil’s HRT Participacoes em Petroleo SA in an oil project in the Brazilian Amazon, an official at TNK-BP said.

The transaction with HRT will be completed in two to three weeks and HRT will remain the operator, said Sergey Funygin, head of TNK-BP’s Venezuela division, today at an oil conference in Puerto la Cruz, Venezuela. The deal will give TNK-BP a 45 percent stake in exploration blocks in the Solimoes Basin where HRT recently found signs of oil, he said.

The companies signed a “definitive agreement” for TNK-BP to join the project, Funygin said. HRT will be the operator for at least two years and the companies have the option to change the agreements’ conditions, he said without offering further details.

TNK-BP is looking for opportunities in Brazil, Africa, the Middle East and Latin America to diversify operations, Funygin said.

Brazil expects to more than double oil production over the next 10 years as it develops the largest discoveries in the Americas in more than three decades.

TNK-BP is buying the stake from Petra Energia SA, HRT’s original partner in the blocks, through an arrangement where HRT has rights to buy Petra’s stake. HRT didn’t return two telephone calls to its Rio de Janeiro office today seeking comments about the deal with TNK-BP.

Venezuela Expansion

TNK-BP, which has stakes in four joint ventures with Petroleos de Venezuela SA, is looking to produce more oil in the South American country and may increase its interests in current ventures or buy new assets, said Funygin. The Russian company has a 16.7 percent interest in the Petromonagas heavy crude venture that was nationalized from Exxon Mobil Corp. in 2007.

Exxon is currently pursuing arbitration with PDVSA, as the Caracas-based company is called, and seeking around $7 billion in compensation in the venture formally known as Cerro Negro.

“We’re waiting for the issue to be resolved with Exxon Mobil, and then we are willing, if the Venezuelan government and PDVSA consider us, to increase our interest in the venture,” said Funygin. “We’ve already told PDVSA that we are ready to sit down and talk about it.”

TNK-BP’s share of production from its joint ventures in Venezuela is around 25,000 barrels of oil a day, said Funygin. Petromonagas, which upgrades about 120,000 barrels a day of heavy crude, will be stopped for a month next year in March or April for programmed maintenance, Funygin said.

--Editors: Robin Saponar, Jonathan Roeder

To contact the reporter on this story: Nathan Crooks in Puerto La Cruz at ncrooks@bloomberg.net; Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: Robin Saponar at rsaponar@bloomberg.net


Race, Class, and the Future of Ferguson
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus