Statoil (STO) To Expand In Brazil With Roncador Stake Buyout
Zacks Investment Research | Dec 17, 2017 09:22PM ET
Statoil (OL:STL) ASA (NYSE:STO) recently announced an accord with Petróleo Brasileiro S.A. or Petrobras (NYSE:PBR) for acquiring a 25% stake in Roncador field, located off the coast of Brazil.
The Norwegian energy giant is expected to pay $2.35 billion initially. The deal also includes a contingent payment of roughly $550 million. Although the company is yet to announce the transaction’s closing date, the agreement awaits consent from the government. Even on completion of the deal, Petrobras will continue to be the operator of the field with a 75% stake.
Notably, Statoil expects the purchase of the Brazilian resources to boost its production in the country by nearly three times. The company added Roncador is the third largest resource in Petrobras’ portfolio in terms of production — the output being roughly 10 billion barrels of oil equivalent (BoE). The companies will also work on driving recoverable volumes from the field.
With the completion of the purchase of Roncador field stake, Statoil will further expand its presence in Brazil. The company has operatorship interest in the country’s resources like Peregrino field, six blocks in Espírito Santo Basin and Carcará North block.
Investors should know that per the recent deal, Statoil could also utilize the option of employing a proportion of Cabiúnas natural gas terminal’s capacity for developing the BM-C-33 block — located off the coast in the Campos Basin.
Headquartered in Stavanger, Statoil is a leading integrated energy firm. Year to date, the stock has rallied 10.5%, outperforming the Zacks Investment Research
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