Total and Petrobras form oil alliance

TOTAL and Petrobras have agreed to explore opportunities for working together on upstream projects, power, and eventually refining in Brazil and across the world.

Pedro Parente, CEO of Brazil’s state energy firm, and Patrick Pouyanne, his counterpart at the French major, signed a memorandum of understanding in Rio de Janeiro on Monday. In the first phase of the agreement, the companies will focus on partnerships in exploration and production, and gas and power.

Petrobras will offer partnerships in projects in Brazil, while Total has agreed to reciprocate by suggesting opportunities abroad. In a press statement, Petrobras said the new alliance will allow the two to combine their expertise in deepwater development to optimise activities in Brazil. The country has some of the most complex fields ever drilled, including the Libra field which lies around 3.5 km below the seabed, which itself lies 2 km below the surface of the sea.

Total is a partner with Petrobras in 15 existing consortia – six abroad and nine in Brazil – including the Libra development. They have partnerships outside Brazil in the Gulf of Mexico, Nigeria, and Bolivia.
The new agreement includes the possibility of extending their partnership in a second phase to explore refining in Brazil.

According to Reuters, Parente said the alliance would give investors greater confidence about Petrobras’ ability to execute its future plans, as it seeks to reduce large debts and overcome an ongoing corruption scandal.