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Brazil: Petrobras signs contract for sale of Frade field interest to PetroRio
29 Nov 2019
Petrobras has signed a contract with PetroRio for the sale of its 30% stake in the Frade concession, located in the Campos Basin, north coast of the state of Rio de Janeiro, for US$ 100 million. Currently, PetroRio holds the remaining 70% of Frade's concession through its subsidiaries.
The transaction also included the sale of the entire stake held by Petrobras Frade Inversiones S.A. (PFISA), a subsidiary of Petrobras, in the company Frade BV, which owns the offshore assets used in the development of Frade field production.
The sale price of US$ 100 million, will be paid in two installments: (i) US$ 7.5 million upon signature of the contract; and (ii) US$ 92.5 million at the close of the transaction, subject to adjustments due. In addition, there is a contingent US$ 20 million due to a potential new discovery in the field.
The transaction closing is subject to the fulfillment of precedent conditions, such as approvals by the Administrative Council for Economic Defense (CADE) and the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
This disclosure complies with Petrobras' divestment guidelines and is aligned with the provisions of the special procedure for assignment of rights on exploration, development and production of oil, natural gas and other fluid hydrocarbons, provided for in Decree 9,355/2018.
This transaction is in line with the portfolio optimization and the improvement of the company’s capital allocation, aiming at generating value for our shareholders.
About the Frade field
The Frade field is located about 118 km from the north coast of the state of Rio de Janeiro, in water depths between 1,050 and 1,300 meters. Production started in June 2009 and the average production in 2019 was about 18,400 boe/day. After the completion of the sale, PetroRio will hold 100% of the consortium and Frade BV through its subsidiaries.