Colombian state-controlled oil company Ecopetrol S.A. (NYSE: EC) (BVC: ECOPETROL) has finalized a deal with global oil giants Shell and Chevron to secure further interest in the offshore exploration bonanza taking place in Brazil’s “pre-salt” Santos Basin.
With the deal, the Bogotá-based company gains a small interest in the Saturno Block.
The Brazilian government, which through its National Agency of Petroleum, Natural Gas and Biofuels (ANP) originally assigned the Saturno Block rights to Shell and Chevron last September, will receive 70.2% of the production from the block.
Shell, the operator of the exploration plan, and Chevron both hold of 45% stake of the remainder. The Bogotá-based company now holds the final 10% stake in the Saturno Block.
The block spans 1,100 square kilometers off the coast of the São Paulo and Río de Janeiro states in the central Santos Basin, which is has vast potential reserves and has enticed most of the world’s largest oil companies to bid for a stake.
The ANP has already concluded five auctions to carve up interest in the basin, with Ecopetrol winning a joint bid last September on another block in the basin with BP and CNOOC.
The company sees expanding its presence in Brazil, in addition to other recent exploration efforts in Mexico, the Gulf of Mexico, and the Caribbean, as key to replenishing its reserves, which began dwindling in recent years when Ecopetrol moved into a more conservative mode to shore up its financials amid the crash in oil prices.
“The agreement provides access the Saturno Block and is subject to approval by Brazil’s Ministry of Mines and Energy and the ANP, as well as other customary closing conditions for this kind of deals,” said Ecopetrol in a statement.