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.

Source: Global E&P Transactions 2010 Review

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.

Source: Derrick Petroleum E&P Transactions Database 

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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Wintershall reported 2010 annual results; Natural Gas Production up 5% over 2009; Plan to further expand E&P activities in the Northern sector of North Sea and in Russia

Wintershall’s 2010 natural gas production was 14.3 bcm, 5% increase over 2009 production of 13.6 bcm. This is due to activities in Argentina and the first entire year of plateau production from the west Siberian field Yuzhno Russkoye. Crude oil and condensate production down 14% to 5.8 million tons compared to 2009 (2009: 6.8). The decrease in oil and condensate production was primarily caused by the OPEC restrictions in Libya.

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Expansion of successful activities in the North Sea
Overall 23 (2009: 29) exploration and appraisal wells were conducted in 2010 in the search for new crude oil and natural gas deposits. Wintershall discovered new resources with twelve of these wells (2009: 17); five in the Norwegian North Sea alone, and three in the British North Sea. The company is involved in six of the twelve biggest oil discoveries made in Norway in the past five years.



Wintershall is planning to continue the search for new reservoirs in its core regions in 2011 and to push ahead with the development of known deposits, especially in the North Sea in the coming years. The company has earmarked investments of more than 1,000 million Euros (US$1409.79 million) for this region by 2015 and is aiming for a production level of 50,000 boepd in the Norwegian and British sectors of the North Sea.

Source:Derrick Petroleum Planned Exploration Wells Database

MOL Hungarian Oil and Gas Plc (MOL) reported 2010 annual results; Production up 33% over 2009; Plan to focus on field development in Syria, Pakistan, Russia, Hungary and Croatia for 2011-2013

In FY 2010, MOL’s average total hydrocarbon production was 143,500 boepd, Crude oil production up 13%, gas production up 49% over 2009. This is due to result of recent years’ major developments turning into production in Syria, Pakistan and the Adriatic offshore area while keeping onshore production at a stable level with enhanced and intensified oil and gas recovery technologies.

Keypoints:

--Production activities in 7 countries

-- Exploration activities in 12 countries

-- $1.7 billion CAPEX for 2011