Brazilian state-controlled oil company Petroleo Brasileiro SA has chosen to enter exclusive talks to sell two shallow water mature oilfields to a group backed by EIG Global Energy Partners, two people familiar with the matter said.
Brazilian energy firm Ouro Preto Óleo e Gás, backed by EIG, made the top bid for the so-called Pampo and Enchova clusters, located in the Campos basin off the coast of Rio de Janeiro state, beating out Trident Energy, a Warburg Pincus-backed firm, the sources said.
The deal could mark EIG’s debut in the oil production business in Latin America’s top producer. It also makes strategic sense for the private equity firm, which earlier this year bought out Brazilian logistics company Prumo Logistica, operator of the nearby port of Acu.
Goldman Sachs will provide debt financing for the bid, whose structure and value were not immediately clear. But sources familiar with the tender, first reported by Reuters in June, said it could fetch around $1 billion.
Ouro Preto declined to comment. Petrobras and EIG did not immediately respond to requests for comment.
World class geology and dwindling reserves mean the world’s top oil majors have invested billions of dollars to take stakes in Brazil’s prolific deep water oilfields in recent months.
But smaller oil companies are often better than large ones at cutting costs and some have honed expertise in squeezing more oil out of mature fields.
EIG will follow in the footsteps of First Reserve Corporation and Riverstone Holdings, private equity firms invested in Brazil’s Barra Energia.
Ouro Preto, created in 2010, is led by former OGX president Rodolfo Landim and has stakes in several basins throughout Brazil, but none in Campos.
A sale of the mature field clusters would also make financial sense for Petrobras, the world’s most indebted oil company, as it seeks to offload $21 billion in assets from 2017 to 2018.
According to Petrobras, the Enchova cluster, which includes the Marimba, Enchova, Bonito, Enchova Oeste Bicudo and Pirauna fields, has 32 wells producing 25,100 barrels of oil equivalent per day. With 27 wells, the Badejo, Pampo, Linguado and Trilha fields of the Pampo cluster produce 13,500 barrels of oil equivalent per day.
Petrobras is selling the rights to the fields until 2025. Both Enchova and Pampo began producing in the 1980s.