PetroSantander and Brazilian sister company PetroReconcavo concentrate on production rather than exploration - "we're a P company, not an E&P company," Gollop said - and in a labor market characterized by scarcity, is presenting majors with the idea of operating certain areas, freeing up their personnel to work elsewhere, and making investments to increase production.
A model for the agreements could be the existing scheme in which PetroReconcavo operates 12 fields in Brazil for federal energy company Petrobras (NYSE: PBR). There Petrobras keeps the basic production according to the declining natural curve, above which PetroReconcavo takes a percentage, Gollop explained.
PetroSantander has not only to convince the majors of its good health, safety and environment (HSE) credentials, it has to identify the person in a large corporation who both knows about an area that PetroSantander is interested in and has the authority to talk about it. This makes the process a lengthy one and the PetroReconcavo arrangement took three years to put in place, Gollop said.
In Colombia, PetroSantander has identified areas it would like to operate, for which it has to negotiate with three majors. Beyond Colombia, the company sees Mexico as an attractive market, Gollop added.
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