OGX Has 6 Interested in Campos Basin Blocks

Campos Basin - Brazil
(Click to Enlarge)

RIO DE JANEIRO (Dow Jones Newswires), Aug. 24, 2010

At least six international oil companies have demonstrated interest in buying a stake in offshore oil fields owned by Brazilian oil and gas company OGX, local financial daily Valor Economico reported Tuesday.

Citing sources with knowledge of the negotiations, Valor said that China Petrochemical, or Sinopec; PetroChina; ExxonMobil; Chevron; Statoil; and an Indian oil company, possibly Oil & Natural Gas Corp. were among the companies expressing interest in the offshore exploration blocks. The firms were unavailable or declined to comment on the report.

The planned farm-out, which OGX first disclosed earlier this year, will likely attract more bidders, Valor reported. OGX will keep its "data room" open for prospective buyers until September.

Eike Batista, the billionaire Brazilian businessman who is OGX's leading shareholder, said earlier this month that the company could sell as much as 30% of its offshore oil discoveries via farm-out deals. Batista said international oil companies were expected to submit proposals for a 25% to 30% stake by last week.

On Friday, OGX's board called for a shareholders meeting to approve the shift of assets to OGX Campos, a move that could be a precursor to the stake sale. OGX Campos will receive a 70% stake in seven offshore exploration blocks in the Campos Basin, where more than 85% of Brazilian crude oil is produced, according to minutes from the board meeting.

Farm-out deals allow companies holding stakes in offshore exploration blocks to reduce risk by bringing minority investors into the fold. OGX wants to capitalize on a series of oil finds the company made in the prolific offshore Campos Basin, where it expects to pump its first oil in the first half of 2011.

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


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