Norway's BW Offshore has won approval from Brazilian oil regulator ANP for the purchase of the Maromba oilfield, part of the Oslo-listed company’s plan to become an operator and not just a supplier of oil services, platforms and ships.
The purchase, from Chevron Corp. and Petrobras extends BW's operations in Brazil, where it already has two floating production, storage and offloading (FPSO) units.
The total purchase price for the oilfield, in the Campos Basin off the Brazilian coast, is $115 million, to be paid over three milestones as the development progresses toward producing its first oil.
Regulatory clearance will lead to the first milestone payment of $30 million, with other milestones marked by the start of drilling activities and first oil production, or three years after the start of drilling activities, whichever comes first.
BW Offshore had in March won approval from Brazil's antitrust watchdog, CADE, to buy the oilfield from Petrobras, which had a 70% participating interest, and Chevron, which held a 30% stake.
"Maromba represents further proof of our upstream business model," said Carl K. Arnet, chief executive of BW Offshore's BW Energy unit. "Maromba is expected to significantly increase our production from 2022 onwards and is a very important element in our growth strategy."
ANP Director General Decio Oddone confirmed to Reuters on Saturday that BW was approved as an oil field operator in Brazil. "It was approved yesterday," Oddone said. "This shows renewed activity in offshore oil production in Brazil."
Analysts said the most core projects will move forward, while shorter-cycle developments will see the most dramatic investment cuts.
Devon Energy had been actively shopping the Permian Basin assets, and others in the Rockies, the past several months.
Production from Occidental Petroleum's Permian Basin unit rose 57% to 250,000 boe/d in the fourth quarter, boosted by its investments in the basin.