PetroRio buys remaining stake in Frade field for $100 million

Brazil’s state-owned Petrobras has signed a contract with PetroRio for the sale of 30% stake in the Frade concession, located in the Campos Basin, north coast of the state of Rio de Janeiro for $100 million.

Currently, PetroRio holds 70% interest of Frade’s concession. The company previously bought Chevron’s 51.74% stake in the Frade field in a transaction which was concluded on March 2019.

The transaction also included the sale of the entire stake held by Petrobras Frade Inversiones S.A. (PFISA), a subsidiary of Petrobras, in the company Frade BV, which owns the offshore assets used in the development of Frade field production.

The sale price of $100 million, will be paid in two installments: $7.5 million upon signature of the contract; and $92.5 million at the close of the transaction, subject to adjustments due. In addition, there is a contingent $20 million due to a potential new discovery in the field.

The transaction closing is subject to the fulfillment of precedent conditions, such as approvals by the Administrative Council for Economic Defense (CADE) and the National Agency of Petroleum, Natural Gas and Biofuels (ANP).

The Frade Field is located about 118 km from the north coast of the state of Rio de Janeiro, in water depths between 1,050 and 1,300 meters. Production started in June 2009 and the average production in 2019 was about 18,400 boe/day. After the completion of the sale, PetroRio will hold 100% of the consortium and Frade BV through its subsidiaries.

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