Petroleo Brasileiro SA Petrobras (ADR)(NYSE:PBR) And Total SA (ADR)(NYSE:TOT) reported that the CEOs of both companies have signed a Memorandum of Understanding. It sets the general agenda for a strategic deal covering Downstream and Upstream activities in Brazil along with international potential prospects.
Through this deal, the firms accept to join forces in some main areas of mutual interest and to assess opportunities in Brazil and other regions to jointly benefit from their globally acknowledged expertise on all divisions of the gas and oil value chain. As a first stage of implementation, the firms plan to focus on Upstream and on Power and Gas.
In Upstream, Petrobras will offer Total to team in ventures in Brazil and Total will advise Petrobras to partner in activities outside Brazil. This new deal will enable both firms to combine their expertise and experience in deep water advancement to optimize the production. It also plans to jointly advance this strategic region of activity in Brazil and in other potential gas and oil provinces, as well as partaking risks and costs associated with complex projects requiring high investment.
In Downstream, the firms will be working to advance joint activities in the power and gas generation in Brazil. The memorandum highlights that the cooperation will be stretched, in a second stage, to a broader collaboration in Brazil concentrated on all downstream divisions.
Currently, Total and Petrobras are jointly joining in 15 consortiums in production and exploration, nine of which are based in Brazil and rest abroad. In Brazil, the firms are partners in the advancement of the giant Libra region. It is the first production sharing agreement in the Brazilian pre-salt. Outside Brazil, Total and Petrobras are associates on the Chinook field in the U.S. Gulf of Mexico, on the gas fields of San Antonio/Itau and San Alberto in Bolivia, on the Akpo field in Nigeria and in the Brazil- Bolivia gas pipeline.
It should be noted that Total is an international integrated energy manufacturer and provider, a pioneer international gas and oil firm, and the globe’s leading solar energy operator with SunPower.