Petrobras bringing sale of 22 onshore and shallow water fields closer to the finish line

Brazilian state-owned oil and gas giant Petrobras has been busy ticking all precedent conditions off the list for the sale of its interest in a cluster, covering a set of 22 concessions of onshore and shallow water fields, in a bid to close this deal. Another step in this direction has been achieved after Brazil’s Institute for the Environment and Natural Resources (IBAMA) handed out the operational license to 3R Petroleum Óleo e Gás’ subsidiary for three fields, which are part of this cluster.

Petrobras disclosed at the end of January 2022 that its board of directors had approved the sale of its total stake (100 per cent) in a set of 22 concessions of onshore and shallow water fields, together with its infrastructure for processing, refining, logistics, storage, transportation and outflow of oil and natural gas, located in the Potiguar Basin, in the state of Rio Grande do Norte, jointly called the Potiguar cluster, to 3R Potiguar, a wholly owned subsidiary of 3R Petroleum.

The total amount of the sale was $1.38 billion, with $110 million paid on the date of signing the purchase and sale agreement; $1.04 billion at the closing of the transaction; and $235 million that would be paid in four annual instalments of $58.75 million, as of 24 March.

However, the Brazilian player underscored that the amounts would not consider adjustments due until the closing of the transaction, subject to compliance with precedent conditions, such as the approval by the National Agency of Petroleum, Natural Gas and Biofuels (ANP). This sale is part of Petrobras’ strategy of concentrating its resources on assets in deep and ultradeep waters.

In an update on Friday, 19 May 2023, Petrobras revealed that IBAMA had issued the operational license in favour of 3R Potiguar for the Ubarana, Ubarana Oeste, and Cioba fields, which are part of the Potiguar cluster. As explained by the Brazilian giant, the license was a precedent condition for the closing of the transaction.

In a separate statement, 3R Petroleum confirmed that the operational license referring to the fields of Ubarana, Ubarana Oeste, and Cioba was issued by IBAMA in favour of its subsidiary, 3R Potiguar. As a result, the company underlines that it has, together with Petrobras, complied with all precedent conditions provided for in the purchase and sale agreement for the Potiguar cluster.

Located in Rio Grande do Norte, the Potiguar cluster comprises three subclusters – Canto do Amaro, Alto do Rodrigues, and Ubarana – totalling 22 fields, with 3 offshore concessions and 19 onshore concessions, and includes access to infrastructure for processing, refining, logistics, storage, transportation and offloading of oil and natural gas.

The Ubarana subcluster concessions are located in shallow waters, between 10 and 22 km off the coast of the city of Guamaré, in the state of Rio Grande do Norte. The other concessions of the Canto do Amaro and Alto do Rodrigues subclusters are onshore.

This comes after Petrobras reported about IBAMA’s rejection of the environmental licensing process for Block FZA-M-59 in Amapá Águas Profundas. It will result in additional costs for the Brazilian giant, which will require the rig and other resources mobilised in the region of Block FZA-M-59 to be directed to the firm’s activities in the Southeastern Basins.