BP in talks to sell stake in Brazil oil discovery to Petrobras, sources say

SEATTLE (Oil Monster): BP is in talks with Petrobras to sell a stake in its Bumerangue ​oil block off the coast of Brazil, two sources at the ‌Brazilian state-run oil firm told Reuters, while cautioning that the potential deal was not considered a priority.

The negotiations are ongoing, but the field's high carbon dioxide content remains an issue, according to ​the sources.

"It seems BP doesn't know what to do with Bumerangue," said ​one of the sources.

Bloomberg News first reported the talks earlier on ⁠Thursday. Petrobras and BP did not immediately reply to requests for comment.

BP currently owns ​100% of the Bumerangue block and said last year that it was seeking a ​partner to help evaluate the discovery before making a final investment decision on the project.

The British energy company has described Bumerangue as its biggest discovery in 25 years, estimating it holds about ​8 billion barrels of liquids and positioning Brazil as a cornerstone of ​its upstream portfolio.

HIGH CO2 CONTENT HURTS ASSET

BP has previously said the carbon dioxide content in Bumerangue ‌can ⁠be managed and that it plans to complete its three-well appraisal plan for the project by the end of the first half of next year.

Petrobras, however, remains wary, the sources said.

A large Petrobras discovery in the Jupiter field, also located in ​the Santos basin, ​remains undeveloped due ⁠to a higher-than-usual CO2 content.

Petrobras' technical staff is analyzing BP's proposal and will provide its assessment of the CO2 concentration, ​the sources said.

The state-run oil firm is developing technology that ​could make ⁠oil reserves with high CO2 content economically viable, but once available it would first be deployed at Jupiter, not Bumerangue, according to the sources.

"One can't think of ⁠Bumerangue before ​finding a solution for Jupiter," said one of ​the sources.

Courtesy: www.reuters.com