Petrobras has acquired stakes in three blocks offshore Sao Tome & Principe, under a deal with Shell.
Under the agreement, the Brazilian company has acquired 45% stakes in Blocks 10 and 13, and 25% in Block 11.
Shell is the operator of the three blocks with a 40% stake, while ANP-STP has 15% stakes. Galp has a 20% interest in Block 11. The three blocks are around the southern island of Sao Tome, in Zone B.
© Supplied by ANP-STPThe Brazilian company said the move marked the resumption of its exploration work in Africa. The aim, it said, is to achieve portfolio diversification, in line with its long-term strategy. This aims to build its oil and gas reserves through frontier exploration and partnerships.
Petrobras signed a memorandum of understanding (MoU) with Shell in March 2023, on the sidelines of CERAWeek. The CEOs of the two companies, Jean-Paul Prates and Wael Sawan respectively, agreed to the terms. The MoU called for the companies to identify business opportunities in the upstream.
Petrobras gave the example of the companies teaming up on 29 exploration blocks in the Pelotas Basin. Shell and Petrobras won the blocks earlier this month.
The Brazilian company set out its new strategic plan in late November. CEO Prates said the company would “seek to replenish reserves and develop new exploratory frontiers that contribute to fulfilling global energy needs while energy transition while minimising the carbon footprint during the ongoing energy transition”.
Petrobras said it would allocate $7.5 billion to exploration over the next five years. Of this most would go to domestic work, but $1.3bn was allocated to exploration in other countries.
The company started retreating from its African engagement around 2015. It sold off its most important African asset, a stake in Nigeria’s Agbami and Egina, in 2020.
Shell and Galp drilled a well in Sao Tome’s Block 6 in 2022. The Jaca-1 well found evidence of a working petroleum system but was not a commercial discovery. It was the first well drilled offshore Sao Tome.
Shell entered Sao Tome in 2019, on Blocks 6 and 11. It then acquired Kosmos Energy’s local interests, giving it entry into Blocks 10 and 13, in 2020.
ANP-STP announced a plan to bring in a partner on its Block 4, in October this year. Farmout Angel reports that the agency is offering 85% to partners in the block, while also offering Block 2. Meanwhile, Oranto Petroleum is seeking a partner for Block 3, to fund an exploration well.