Bloomberg News

Total Seeks to Expand Brazilian Operations With Petrobras Block

July 10, 2012

Total SA (FP), Europe’s third-biggest energy company, took control of an offshore oil block in Brazil from Petroleo Brasileiro SA (PETR4) as it seeks to expand its operations in the South American country.

“Our decision to assume operatorship of Xerelete is part of the group’s strategy to strengthen its exploration and production activities in Brazil,” Ladislas Paszkiewicz, senior vice president for exploration and production in the Americas, said in a statement.

Petrobras, as the Brazilian state-owned company is known, is focusing its exploration and production activities on the so- called pre-salt reserves and on newer areas such as the country’s northern coast as it tries to compensate for dwindling output from aging wells in the Campos Basin, where Xerelete is located. The pre-salt reserves are trapped under the ocean bed beneath layers of salt up to 3,000 meters (9,800 feet) deep.

Total, which owns 41.2 percent of the 2,400-meter deep Xerelete block, plans to start drilling in 2013. Petrobras owns another 41.2 percent while BP Plc (BP/) holds the remaining 17.6 percent of Xerelete, which was discovered in 2001 and under which a “pre-salt prospect has also been identified,” according to Total’s statement.

To contact the reporter on this story: Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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