OGX Gives Up Rights to Acquire Blocks Won in 11th Licensing Round (Brazil)
Eike Batista’s OGX has announced that its new business plan, which was derived from the decision to suspend the development of the Tubarão Tigre, Tubarão Gato and Tubarão Areia fields in Brazil, the Company’s Management has decided to reassess the exposure strategy on additional exploratory risks.
Consequently, the Management decided that at this time it will not be recommending any new exposure to exploratory risk in areas where OGX has not established partnerships with other companies, which would mitigate the exploration risk.
As a result, during a meeting held on August 26 2013, the Company’s Management decided to relinquish the right to acquire blocks BAR-M-213, BAR-M-251, BAR-M-389, CE-M-663, FZA-M-184, PN-T-113, PN-T-114, PN-T-153 and PN-T-168, which it won without partnerships during the ANP’s 11th Exploration License Round. The penalty cost will be of an estimated amount of R$3,420,000.00;
Also, the company announced it would proceed with the bonus payment and the signature of the concession contracts for blocks CE-M-603, CE-M-661, POT-M-762 and POT-M-475, which it won in partnerships with ExxonMobil, TOTAL E&P and Queiroz Galvão Exploração e Produção (QGEP).
Earlier this month, the company reported a massive quarterly net loss of R$4.7 billion (around USD 2 billion).
The results were impacted by expenses of R$3.6 billion (around USD 1.54 billion) related to the impairment of the investments carried out in Tubarão Azul, Tubarão Tigre, Tubarão Gato and Tubarão Areia fields as it was concluded that their development would not be economically viable. The company then, consequently, called off the construction of FPSO OSX-4 and FPSO OSX-5, as well as WHP-1, WHP-3 and WHP-4 by OSX, resulting in a cash disbursement of approximately US$449 million in compensation to OSX.
Offshore Energy Today Staff, August 27, 2013