(Updates with discoveries in third paragraph.)
Feb. 23 (Bloomberg) -- BP Plc, Europe’s second-largest oil company by market value, will take stakes in two blocks off Brazil’s northeastern coast as producers bet the area may hold similar reserves to those found in Western Africa.
BP received authorization to take 40 percent in the BM-BAR- 3 and BM-BAR-5 blocks in the Barreirinhas basin from Petroleo Brasileiro SA, the Brazilian oil regulator said on its website. The agency, known as ANP, didn’t disclose terms of the deal.
Oil companies are betting deepwater areas in the Atlantic off northeastern Brazil, Guyana, Suriname and French Guiana hold similar reserves to those found on the opposite side of the Atlantic. Anadarko Petroleum Corp., Tullow Oil Plc and Repsol YPF SA announced offshore finds in Sierra Leone this month.
BP plans to increase oil production in Brazil after paying $3.2 billion to buy nine exploration licenses from Devon Energy Corp. last year. BP received approval from the ANP in January to acquire a 40 percent stake from Petrobras in the BM-CE-1 block in the Ceara basin, also in deep waters off northeastern Brazil.
Petrobras, as the state-controlled producer is known, is selling assets in Brazil and abroad to help finance $224 billion of spending, the largest investment plan in the oil industry.
In these types of transactions, known as farm in, the buyer usually agrees to pay for a portion of previous exploration expenses and part of upcoming drilling costs, Bob Fryklund, vice president of energy consulting and research firm IHS CERA Upstream Research, said in a telephone interview from Rio de Janeiro. He estimates BP paid about $100 million to Petrobras.
A spokeswoman at the ANP, who can’t be named under agency policy, declined to comment further on the deal. A press official at BP in Rio de Janeiro did not respond to an e-mail seeking comment and could not be reached by telephone. Petrobras didn’t immediately respond to a telephone call and an e-mail seeking comments.
BP fell 0.4 percent to 495.20 pence at 1:56 p.m. in London. Royal Dutch Shell Plc. is Europe’s largest oil company by market value. Petrobras fell 2 centavos to 23.87 reais of 2 p.m. in Sao Paulo.
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