Brazilian Petrobras recently entered into a Farm-Out Agreement with Shell Deepwater Tanzania BV in which the later has acquired granted 50 per cent of its interest in offshore Blocks 5 and 6 in Tanzania.
Shell Deepwater Tanzania BV is an affiliate of Royal Dutch Shell. However, the financial terms of the deal were not disclosed. Located in the Indian Ocean, the depths of the wells range from 600 to 3,000 meters.
According to reports, the Brazilian state-controlled company’s local unit, Petrobras Tanzania, which held 100 per cent interest in each of the blocks prior to the transaction, will continue to act as the operator of the field.
The Tanzanian Petroleum Development Corporation, the state controlled oil company is the concessionaire of both the blocks. Petrobras ventured into the Tanzania oil sector with the signing of the agreement for Block 5 with TPDC in 2004.
Two years later, Petrobras inked the deal for Block 6. Currently, the Zeta-1 well is being drilled in Block 5, which is expected to be completed by the end of the year, while 3D seismic interpretation work is currently being carried out for Block 6.
Headquartered in Rio de Janeiro, Petrobras primarily engages in exploration, exploitation and production of oil from reservoir wells, shale and other rocks, in refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons as well as in other energy-related activities.
According to analysts Petrobras has a very positive medium- to long-term outlook based on its encouraging portfolio of investments. The company has been able to successfully leverage its Brazilian deepwater expertise into exploring upstream opportunities overseas.
However, Petrobras’ huge investment requirements, operational risks typical to an exploration and production company and tough competition from peers keep our optimism clouded. Unpredictable energy prices and government regulations also add to the negative sentiment.
