Thursday, May 12, 2011

BP looks for acquisition opportunities in Brazil and Russia.. Plans to spend $20 billion in 2011.

BP is looking to acquire stakes in Brazilian oil fields to increase the production in South America”, said Guillermo Quintero, president of BP's Brazil division, during a press conference. Guillermo added saying, "We can't reveal the names for strategic reasons, but we have two or three farm-in negotiation processes underway. We didn't come to Brazil just to continue what Devon started, Brazil is strategic for us."
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Capital of $20 billion set for 2011
BP plans to spend $20 billion to expand its operations around the world in 2011 and is looking to new areas including Brazil and Russia to increase the oil production. BP's assets in Brazil include 10 blocks. Only one of them is in production phase with output of around 25,000 bpd. Guillermo said BP's production in Brazil could reach 100,000 bpd, but did not offer a clear time frame for this.
Also, BP has plans to participate in Brazil's 11th bidding round to be held in September 2011, which will not include blocks in the coveted deep-water region known as the subsalt that is home to the country's largest oil discoveries.
Status of M&A activity in BRAZIL
Recently, BP received the final approval to complete the purchase of ten exploration and production blocks in Brazil from Devon Energy. In 2010, the Chinese were active acquiring assets in Brazil. In addition, Brazil's Mines and Energy Ministry is planning to include frontier areas in north and northeast Brazil in the highly anticipated round 11 for new oil and natural gas blocks. The round is also expected to include onshore and deepwater areas in mature basins, in addition to equatorial margin basins in the northeastern and northern regions.
The map shows the major 2010 deals in Brazil.
Opportunities available in Brazil
Derrick Petroleum has aggregated all publicly announced properties for sale. Derrick’ Deals in Play is the most comprehensive data set of its kind in the industry. The following table shows the prolific opportunities available in Brazil.
Though 2010 was a disaster for BP due to Macondo oil spill, 2011 seems like a progressive year for BP that has clinched the $7.2 billion alliance with Reliance and announced $20 billion capex for acquisitions in 2011. The following graph shows 2010 production and capex of BP compared with its peers.

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