Total and Petrobus team up in joint venture

Total and Petrobus team up in joint venture

French energy firm Total (LSE:TTA) and Brazilian petroleum corporation Petrobras (BVMF:PETR4) have announced  they will be partnering each other in a US$2.25 billion joint venture agreement.

The deal involves Petrobus transferring rights of varying percentages in three concession areas across Brazil to Total.

The South American company will transfer 22.5% of the rights to Total in the ultra-deepwater oil field named Iara, along with 35% of the rights in the Lapa field concession, which will consequently by operated by Total.

Furthermore, Total will take a 50% interest in the Termobahia cogeneration plant facility, located in the Bahia region, with the French multinational taking over regasification services to supply gas to the power plants.

“These new partnerships together with a reinforced technological cooperation should create significant synergies and values, mutualising our operational excellence and further reducing costs on our joint projects for the benefit of both companies,” said Total CEO Patrick Pouyanne and Petrbras CEO Pedro Parente in a joint statement.

Total’s payments to Petrobras include $1.6 billion in cash, with the strategic partnership part of a five-year plan laid out by the Brazilian firm to improve its financials and mitigate risks.