CNOOC, Sinochem Bid for Statoil's Stakes Offshore Brazil

Peregrino Field
(Click to Enlarge)

BEIJING (Dow Jones Newswires), May 12, 2010

Two Chinese oil companies, Cnooc and Sinochem have submitted separate bids for stakes in a large offshore oil field in Brazil in which Norwegian state oil company Statoil ASA (STO) is selling a 40% share, two persons familiar with the matter said.

Statoil has now closed the bidding for the stake in the Peregrino oil field, and the outcome is expected very soon, said one source, who has first-hand knowledge of the bids but who declined to be named.

It is unclear if the two Chinese companies are competing for the full 40% being offered, or if they are each bidding for part of it. Usually Chinese oil companies don't compete with each other in efforts to buy up foreign assets.

The news is the latest in a series of Chinese oil and gas investments throughout Latin America. In March, Cnooc Ltd said it was spending $3.1 billion in a joint venture with Argentina's Bridas Energy Holdings Ltd.

Cnooc in December signed a preliminary agreement to develop the Boyaca 3 oil field in Venezuela's Orinoco basin, and in 2009 Cnooc made headlines worldwide when it bought into four offshore oil field leases held by Statoil in U.S. waters of the Gulf of Mexico.

Statoil holds 100% of the shallow-water Peregrino oil field, located in the BM-C-7 block in the Campos Basin some 85 kilometres off Rio de Janeiro. The field is in the developing stage, and Statoil describes it as one of the largest fields outside of Norway in which it is the operator.

Peregrino is estimated to hold recoverable reserves of about 500 million barrels of heavy oil, rated at between 14 degrees and 16 degrees on the American Petroleum Institute's rating scale.

China's other two oil giants, China National Petroleum Corp. and China Petrochemical Corp, or Sinopec, didn't bid, one source said.

CNPC, China's leading oil company by assets, in April reached deals with Brazil state oil company Petroleo Brasileiro SA (PBR), or Petrobras on crude oil exploration in two Brazilian deepwater blocks.

The sources were unable to put a value of the bids from the Chinese companies.

China's top energy official Zhang Guobao Friday, in comments to Dow Jones Newswires, said he had heard Cnooc is bidding for a Brazil asset, but didn't give details.

Cnooc Ltd's spokesman Jiang Yongzhi said the company had "no comment on market rumors" and Sinochem news official Hu Hongjun said that the company "has no information available on this for the public."

In 2009, Statoil held a roadshow for its Peregrino stake, during which it talked to the big four Chinese state oil companies--CNPC, Sinopec, Cnooc and Sinochem.

Statoil says it expects Peregrino will start production early in 2011, with this rising to about 100,000 barrels of oil equivalent per day in its first phase of development.

Last October Brazilian newspaper O Globo reported that Statoil planned to sell 40% of the field.

When asked by Dow Jones at the time to respond to the article, Statoil spokeswoman Mari Dotterud said that "we never comment on rumors. But as a general comment, within the oil and gas industry, keeping 100% ownership over the total lifetime of an asset would be unusual."

Copyright (c) 2010 Dow Jones & Company, Inc.


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