Posted by: mulrickillion | November 4, 2011

TNK-BP seals Amazon deal


By Samantha Pearson, Oct 31, 2011 — It’s the kind of project that takes guts. TNK-BP, BP’s Russian oil venture, finally sealed a $1bn deal on Monday for a 45 per cent stake in 21 oil and gas exploration blocks deep in Brazil’s Amazon rainforest.

Brazilian start-up HRT, which is selling the stake, will continue to operate the blocks for another 2 1/2 years but, after that, the Russians have the option to buy another 10 per cent and take over.

From TNK-BP’s point of view, it’s not hard to see what the attractions are. The blocks should give the Russian venture about 789m barrels of oil equivalent and a vital foothold in Brazil, which is set to become one of the world’s top producers of the next decade.

But for a group that has largely stuck to buying assets already in production, TNK-BP’s first foray into oversees exploration certainly seems ambitious.

The oil reserves, which are part of the Solimões river basin in north-western Brazil, have been known about for years but remain largely untapped. And there is a reason why.

The region is already under intense environmental scrutiny and TNK-BP will be forced to rely on costly logistics, such as flying in rigs in pieces by helicopter and pumping oil and gas via flexible pipelines to barges waiting miles away on the river.

It’s no surprise that Petrobras, Brazil’s own state oil giant, has made little of their Amazon discoveries and decided to focus on the“pre-salt” reserves off the coast of Rio de Janeiro instead. . . .

TNK-BP seals Amazon deal | beyondbrics | News and views on emerging markets from the Financial Times –


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