Enterprise Oil Secures Key Agreements in Brazil

Enterprise Oil, the UK's largest independent, has secured two crucial upstream agreements with state oil company Petrobras, marking its expansion into Brazil's growing oil sector. The company, which has exhausted major growth opportunities in its home region, is capitalizing on the Brazilian market to pursue new opportunities. Analysts see this move as a strategic step towards Enterprise's future growth, as the company seeks to develop its deepwater exploration skills.

Key Takeaways:

• Enterprise Oil has signed two long-awaited upstream agreements with Petrobras, gaining a stronger foothold in Brazil's emerging oil sector.
• The agreements include a 55% stake in the Bijupira-Salema fields, with Enterprise serving as operator, and a 25% interest in the BCE-2 frontier exploration block.
• The Bijupira-Salema fields are estimated to have combined reserves of 150 million barrels of oil equivalent and are expected to begin oil production in 2003 at an initial level of 50,000 barrels per day.
• The partners plan to spend around $450 million over the next three years to develop the fields, with Petrobras conducting early pilot production and having already drilled 11 wells.
• Enterprise's sealing of the Bijupira-Salema deal was seen as a coup, as Amerada Hess was also interested in the producing fields.
• The company is planning to build a significant business in Brazil before looking to expand elsewhere in the region.
• Analysts see this move as a strategic step towards Enterprise's future growth, as the company seeks to develop its deepwater exploration skills.

Statistics:

• 150 million barrels of oil equivalent reserves in the Bijupira-Salema fields.
• $450 million estimated cost of developing the Bijupira-Salema fields over the next three years.
• 11 wells drilled by Petrobras in the Bijupira-Salema fields.
• 50,000 barrels per day initial oil production planned for 2003.
• $17 million estimated cost of the exploration program for the BCE-2 frontier exploration block.
• 1,543 miles of two-dimensional seismic to be acquired by August 2001.

Sources:

• "Merrill Lynch analyst Jonathan Wright"
• "Petrobras estimates the cost of the exploration program at $17 million"
• "Petrobras has already drilled 11 wells and acquired three- dimensional seismic coverage on the field area." (Source: Petrobras)
• "Amerada Hess Executive Director Sam Laidlaw is in Rio de Janeiro this week on business related to his Campos Basin assets."