Repsol and Sinopec close $7.1B Brazil exploration and production JV agreement; Sinopec 40% owner
29 December 2010
Spain-based Repsol and China-based Sinopec successfully closed the agreement reached in October to develop jointly the exploration and production of its Brazil offshore assets and to create one of the Latin America’s largest private energy companies. Sinopec has provided $7.1 billion to Repsol Brazil, resulting in a company valued at $17.8 billion.
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| Repsol and Sinopec Exploration and production assets in Brazil. Click to enlarge. |
The injection of funds by Sinopec in this transaction will allow Repsol Sinopec Brazil to fully develop all of its current projects, which include some of the world’s largest exploratory discoveries in recent years. Brazil’s Offshore holds one of the world’s fastest-growing oil and gas reserves.
After completing this transaction, Repsol holds 60% of the shares of Repsol Brazil while Sinopec holds the remaining 40%. These shareholdings are reflected in the composition of the Board of Directors of the company, made up by 10 members and chaired by Nemesio Fernandez-Cuesta, Repsol YPF’s Executive Managing Director of Upstream.
Both companies have signed a shareholders’ agreement to jointly develop the current exploration and production businesses in Brazil, bringing together the necessary resources and sharing certain operational and financial strategic decisions.
Repsol said that its agreement Sinopec highlights the enormous international interest in the pre-salt exploration and production activity led by Petrobras, where Repsol Brazil has a very high profile due to the quality of its assets in that area.
Both Repsol and Sinopec will continue their expansion plans in Brazil and will participate, jointly or independently, in future bids in Brazil.
China is taking proper steps to ensure future access to enough crude oil. They are also getting deeply involved into Alberta Tars sands. A Trans- Rockies pipeline is in the mill.
Posted by: HarveyD | 29 December 2010 at 09:00 AM
China is making deals and the U.S. oil companies are not. This causes concern for future resources and it is part of the market system we hear so much about. Lots of talk about how this is the way to go until they lose out to a better deal.
Posted by: SJC | 29 December 2010 at 12:54 PM