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.
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
