Total, Petrobras Ink Strategic MOU

Petrobras and Total signed a memo of understanding October 24 in Rio de Janeiro that sets the general framework for a strategic alliance, both up- and downstream, in Brazil as well as international potential opportunities. The two firms said initially they intend to focus on Upstream and Gas & Power.

In Upstream, each will propose the other as partner in opportunities outside Brazil. “This new partnership will allow both companies to combine their world class experience and expertise in deep water development to optimize the production and jointly develop this strategic area of activity in Brazil and in other high potential oil and gas provinces, as well as sharing costs and risks in projects with high investment and complexity,” their statement noted.

Downstream, the duo will work to develop joint activities in gas and power generation in Brazil. The memo, signed by Total CEO Patrick Pouyanne and his Petrobras counterpart Pedro Parente, said that cooperation will extend, in a second phase, to broader cooperation in Brazil focused on all segments of the downstream.

Petrobras and Total currently participate jointly in 15 worldwide E&P consortia, nine of which in Brazil where they are working together in the giant Libra offshore area development. Outside Brazil, the two are partners on the Chinook (US Gulf), deepwater Akpo (Nigeria) oilfields and the San Alberto and San Antonio/Itau gasfields in Bolivia, as well as in the Bolivia-Brazil gas pipeline.

Bolivia-Brazil gas pipeline (Photo credit: TBG)

In recent months, Petrobras has signed MOUs to cooperate with Statoil and separately with Portugal’s Galp. Such MOUs may indicate a general willingness to maintain close cooperation, despite a scaling back worldwide of new E&P projects.

Mark Smedley