Acquisition of two Brazilian offshore clusters facing delay after being put on hold

Oslo Stock Exchange-listed oil and gas E&P company BW Energy is anticipating a delay in the closing of the acquisition of two assets in the Espírito Santo Basin offshore Brazil, after the ongoing divestment programme of the country’s state-owned oil and gas giant, Petrobras, was suspended.

BW Energy confirmed on Thursday, 2 March 2023, that it was informed by Petrobras of a review of the sale of Golfinho and Camarupim clusters, as part of a wider analysis of Petrobras’ ongoing divestment programme, initiated by the Ministry of Mines and Energy (MME) in Brazil. 

The company explains that the MME requested a suspension of ongoing sales of assets for 90 days without putting Petrobras’ interests at risk, according to a Petrobras filing with the U.S. Securities and Exchange Commission. This includes a letter from the Brazilian Ministry of Mines and Energy (MME) dated 28 February 2023. 

As a reminder, BW Energy signed an agreement in June 2022 to acquire a 100 per cent working interest in the Golfinho and Camarupim clusters and a 65 per cent stake in the BM-ES-23 block offshore Brazil from Petrobras. Following the completion of the transaction, BW Energy will be the operator of all concessions. In addition, the firm agreed to acquire the FPSO Cidade de Vitoria, producing on the Golfinho field, from Saipem.

Both transactions, subject to the fulfilment of waiver of conditions precedent, were expected to close in the first quarter of 2023. However, BW Energy expects that the MME’s general suspension request may result in a delay in the closing of the transactions. 

According to Petrobras, the suspension of the sales of assets is due to the reassessment of the National Energy Policy currently underway and the establishment of a new composition of the National Energy Policy Council (CNPE).

“The board of directors will analyse the ongoing processes, from the standpoint of civil law and within the rules of governance, as well as any commitments already made, their punitive clauses and their consequences, so that the governance bodies assess potential legal and economic risks arising, subject to the rules of secrecy and other applicable governing rules,” highlighted the Brazilian giant.

Located at a water depth between 1,300 and 2,200 metres in the Espírito Santo Basin, the Golfinho Cluster comprises the Golfinho oil field, the Canapu non-associated gas field, and the exploration block BM-ES-23, which holds the Brigadeiro gas and condensate discovery.

On the other hand, the adjacent Camarupim Cluster is located in water depths between 100 and 1,050 metres, comprising the non-producing gas fields of Camarupim and Camarupim Norte.