Phillips Finalizes Agreement for Blocks Offshore Brazil

Phillips Petroleum Company and the Brazilian government have signed concession agreements finalizing the award of two exploration blocks.

The company, bidding alone, previously placed winning bids on BM-ES-11 and BM-PAMA-3 in Brazil's third bid round held in June. Both blocks are located in deep water offshore Brazil. Phillips will operate the blocks and plans to begin seismic acquisition, as well as geological and geophysical evaluations, on the blocks after the signings are complete.

BM-ES-11 is located in the northern portion of the Greater Campos Basin, home to 80 percent of Brazil's current hydrocarbon production. The previously unexplored block is located 75 miles northeast of the giant Roncador field.

BM-PAMA-3 is located in the Para Maranhao Basin, part of the southern Amazon Fan. Deepwater drilling has not been conducted in this basin, although several discoveries have been made on the shelf.

"We've been studying selected basins in Brazil for quite some time, and our analysis shows that these areas are promising," said Bob Fryklund, Phillips' general manager for Brazil. "In addition, over the past year, we have developed a strong relationship with the local industry and regulatory bodies, and are now ready to begin operations here."

"We're extremely pleased to add these two exploration blocks to our worldwide deepwater portfolio," said Dodd DeCamp, senior vice president of worldwide exploration. "The addition of these blocks is consistent with our strategy to increase our presence in high-potential deepwater areas, establish ourselves as a deepwater operator, and establish deepwater exploration as a major element of the company's worldwide exploration portfolio."