* BP, Anadarko, IBV are partners in areas hit by writedown
* Maersk sells 40 pct of Polvo field to Brazil's HRT
* Writedown questions Maersk's oil strategy, analyst says
(Adds Wood Mackenzie analyst on Brazil's subsalt plays,
By Ole Mikkelsen and Jeb Blount
COPENHAGEN/RIO DE JANEIRO, July 8 Danish oil and
shipping group A.P. Moller-Maersk moved to shrink its Brazilian
petroleum operations on Tuesday, selling its stake in its only
producing Brazilian oilfield and saying it will write off $1.7
billion of investments in the country.
The write-off affects two exploration areas, Itaipu and
Wahoo, which failed to deliver on oil volume expectations, and
the Polvo field, both northeast of Rio de Janeiro in the Campos
Basin, Maersk said.
Maersk bought the assets from South Korea's SK
Energy Co Ltd for $2.4 billion in 2011. On Tuesday,
Brazil's HRT Participacoes em Petroleo SA said it
bought Maersk's 40 percent Polvo stake for an undisclosed sum.
If Maersk's assessment of Itaipu and Wahoo is correct, its
Brazilian retreat could be followed by its partners in these
areas: Britain's BP Plc, U.S.-based Anadarko Petroleum Co
and India's IBV Brasil SA, a joint venture between
Videocon Industries Ltd and Bharat Petroleum Corp
"There was significantly less oil than we had expected,"
Chief Executive Nils Smedegaard Andersen told reporters on a
conference call. "In addition, the expectation for the price of
oil back in 2011 was more optimistic than today."
The CEO said Maersk's move comes as Brazilian exploration
and production costs soar. BP declined to comment, Anadarko and
IBV officials could not be reached for comment.
Such costs have helped cool a Brazilian offshore oil boom
that began with the 2007 announcement of giant, offshore fields
near Rio. Since then stagnant oil production, increased
government control and regulatory uncertainty have undermined
the value of the country's oil resources and the shares of
Brazilian oil companies such as state-run Petroleo Brasileiro SA
The Campos Basin lies next to the Santos Basin, which holds
prolific fields such as Jupiter, Tupi and Libra. These gave rise
to a flurry of international interest in Brazilian subsalt oil -
reservoirs that lie underneath layers of salt.
The Campos basin had been seen as riskier, however, said
Wood Mackenzie's head of Latin America upstream research, Ivan
"There's always been a big question mark over how good the
Campos Basin is going to be," Cima said.
"The Campos Basin has not been as prolific as the Santos,
where we recently saw very good results," he said, adding the
energy consulting group now had to rework its estimates of the
reserves in the two plays.
"As of this morning, our estimates have been thrown out of
The writedown didn't affect the Maersk Group's guidance for
an underlying profit of about $4 billion in 2014.
Smedegaard Andersen described Itaipu and Wahoo's appraisal
results as "clearly unsatisfactory." Jyske Bank analyst Frans
Hoyer questioned the company's longer-term oil ambitions.
"This is more a question of how to assess Maersk's ability
to succeed in the oil sector," Hoyer said. "I think that
strategy is being questioned today."
Maersk has a target of 400,000 barrels per day (bpd) by
2020. It produced 235,000 bpd last year. The group received an
average of 4,219 bpd from its 40 percent of Polvo in May, less
than 2 pct of 2013 output.
Group oil production has fallen since 2005 as older North
Sea fields decline. Maersk now spends $3-$5 billion a year
developing new fields in Qatar, Kazakhstan, Algeria and Britain.
Its shares fell 1.4 percent to 13,420 Danish crowns.
(Additional reporting by Shida Chayesteh, Stine Buch Jacobsen
and Sabina Zawadzki in Copenhagen; Editing by David Goodman,
Chizu Nomiyama and Jane Baird)