PetroRio sells stake in large gas field offshore Brazil

Oil and gas company PetroRio has signed binding documents with Gas Bridge concerning the sale of the 10 per cent interest held by the company in the Petrobras-operated Manati gas field located offshore Brazil.

PetroRio said on Thursday that the total transaction value was R$144.4 million ($25.97 million) and includes the transfer of all the company’s liabilities in the field, including its participation in the abandonment.

The transaction depends on conditions precedent, among which is the success of Gas Bridge in the acquisition of Petrobras’ Manati operation.

The deal comprises a fixed tranche of R$124.4 million and an earn-out of R$20 million, subject to certain subsequent field-related regulatory approvals.

The effective date of the sale is 31 December 2020, and the company will continue to be entitled to the field’s cash generation until such date.

PetroRio said that this move is part of its value generation strategy through dynamic management of its asset portfolio and reinforces its focus on operated assets that composes the core of its business.

Located in the Camamu-Almada Basin, 65km from Salvador, the Manati field is one of the largest non-associated gas producers in Brazil, providing around 30 per cent of the gas demand for the Northeast of the country.

The field is operated by Petrobras and PetroRio gained its 10 per cent interest it is now selling after completing the purchase of Brasoil in 2016.

The Manati project includes a fixed production platform, gas compression station, and a natural gas treatment plant. All of it is connected by a 125km gas pipeline.

The field started operating in 2009 and its average production in 2019 was 105 bpd of condensate and 1,269 thousand m3 /day of gas, through the PMNT-1 fixed platform, which involves a submarine structure composed of six gas-producing wells.

It is worth noting that Petrobras started the opportunity disclosure stage (teaser), referring to the sale of its entire 35 per cent stake in the Manati field in early May 2020.

The non-binding phase for the sale of the stake started at the beginning of June and the binding phase started in August.

Gas Bridge has also previously entered into an agreement with Enauta to acquire its entire 45 per cent stake in the Manati field. The agreement was signed back in August 2020 and it is expected to be closed by 31 December 2021.