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PetroChina buying Peruvian assets from Petrobras

Beijing-based PetroChina Co. Ltd. announced that two of its subsidiaries will purchase the Peruvian assets of Petrobras for US$2.6billion (HK$20.16billion) according to a statement sent to the Hong Kong Stock Exchange (SEHK) on 13 November 2013.

Beijing-based PetroChina Co. Ltd. announced that two of its subsidiaries will purchase the Peruvian assets of Petrobras for US$2.6billion (HK$20.16billion) according to a statement sent to the Hong Kong Stock Exchange (SEHK) on 13 November 2013.

CNPC E&D Holdings Cooperatief U.A. and CNODC International Holding Ltd. will acquire all shares of Petrobras Energia Peru SA through an acquisition agreement with owners Petrobras International Braspetro B.V. (0.21%) and Petrobras De Valores Internacional De Espana S.L. (99.79%).

The PetroChina companies will take over two blocks in Peru wholly owned by the Brazilian state-run Petrobras, including Lot X and Lot 58, near Camisea, in the Department of Cuzco. The Urubamba, Picha, and Taina wells in Lot 58 produce natural gas and condensate.

The third block, Lot 57, is jointly owned by Petrobras (46.16%) and Repsol Exploración Perú S.A., Sucursal del Peru (53.84%). Lot 57 includes the Kinteroni gas field, with Repsol-estimated reserves of 2tcf, about to start production.

PetroChina said the three blocks have "sizeable recoverable reserves," and are currently producing 0.8 million tons oil equivalent annually. Simon Powell, Asian Head, Research Division at CLSA Ltd. in Hong Kong, estimated reserves at 12.1 billion boe.

Petrobras entered Peru in 1996, produces about 16,000 bod, and holds licenses in the Maranon, Huallaga, and Madre de Dios basins. 

Lately, Petrobras has been divesting assets to fund deepwater development off Brazil and add refinery capacity. The company has raised $7.4billion this year, including this Peru deal, but it plans to spend $237billion through 2017.

The sale in contingent upon approval from PRC and Peruvian authorities, and Repsol's agreement to relinquish preferential rights in Lot 57, before 13 November 2014.

PetroChina said, "Peru is among the relative stable countries in Latin America in terms of investment environment. The three target blocks are of relative good quality, with expected profitability potentials. The success of the project will help to expand the scale of cooperation of the Group in Latin America oil and gas field and promote the sustainable development in the overseas business of the Group."

Image: Hong Kong Stock Exchange (SEHK) trade lobby; photo by WiNG, 2007.

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