August 31, 2018 / 6:41 PM / 8 months ago

Petrobras, Total ink deals for Brazil government share of pre-salt oil cargo

FILE PHOTO: The logo of Brazil's state-run oil company Petrobras is pictured in the company headquarters in Sao Paulo, Brazil February 20, 2018. REUTERS/Paulo Whitaker/File photo

RIO DE JANEIRO (Reuters) - Brazil’s state-run oil company Petrobras (PETR4.SA) and France’s Total (TOTF.PA) on Friday agreed to buy millions of barrels of oil cargo from the Brazilian government, its first successful auction of its share of output from the pre-salt offshore play.

The auction, held by Pre-sal Petroleo SA, the state company managing contracts for pre-salt oil development, was the government’s second attempt to sell its share of oil from three fields in the Santos offshore basin.

A first attempt in May yielded no bids. On Friday, private oil majors Royal Dutch Shell (RDSa.AS) and Repsol-Sinopec, though registered to bid, sat on the sidelines.

Oil majors have plowed top dollar into Brazil to lock in stakes in the offshore pre-salt oil play, where billions of barrels of oil are trapped under a thick layer of salt.

Brazilian rules dictate that companies vying for stakes in the pre-salt area must bid by promising a share of oil production to the government.

Petrobras first signed on to receive about 10.6 million barrels of oil over the next three years, which represents the government’s share of expected output from the Mero area which is located in the Santos Basin’s Libra field.

It is being developed by a consortium that includes Petrobras with 40 percent, Shell and Total SA each with 20 percent, and Chinese state oil companies CNOOC Ltd and China National Petroleum Corp each holding 10 percent.

Petrobras also agreed to take an expected 600,000 barrels over the next 36 months from the Sapinhoa field in the Campos basin from the government. There, Petrobras has a 40 percent stake, Repsol Sinopec has 25 percent, and Royal Dutch Shell holds 30 percent.

Meanwhile, Total agreed to a 12-month contract for oil from the Lula field in the Santos basin, which should total some 1.1 million barrels. That field is operated by Petrobras, with a 65 percent stake. Shell has a 25 percent stake there while Petrogal has 10 percent.

Reporting by Roberto Samora and Alexandra Alper; Editing by David Gregorio

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