Petrobras Acquires Stake in Block L Offshore Equatorial Guinea

Petrobras says that the Government of Equatorial Guinea has approved its acquisition of a 50% participating interest in a production sharing contract covering Block L.

Located in the deepwater portion of the Rio Muni basin, the prospective Block covers an area of 4,250 kilometers, in water depths ranging from 500 to 2,200 meters.

The 50% participating interest in the production sharing contract has been acquired from the current participants in Block L (new participating interests in brackets): Chevron Equatorial Guinea Limited (22.5%), Amerada Hess Equatorial Guinea Resources Inc. (12.5%), Energy Africa Equatorial Guinea Limited (10%) and Sasol Petroleum International (PTY) Limited (5%). Chevron will remain as operator of the Block with Petrobras having the option of becoming the operator in case of a commercial discovery. Block L is in the vicinity of the prolific Block G, operated by Amerada Hess, in which 8 oil fields have been discovered, including the Ceiba field, already in production.

Block L has excellent potential for a future addition of international reserves for Petrobras and the first exploratory well is expected to be drilled in 2006. If successful, first oil may occur by the beginning of next decade, helping Petrobras to achieve its international production goals.

The execution of this contract is in compliance with Petrobras Strategic Plan, which includes the search for deep and ultra deep water opportunities in West Africa.

Petrobras has now assets in 16 countries over 3 continents, comprising activities in the whole chain of oil, gas and energy industries. With this acquisition, Petrobras increases its presence in upstream activities, being currently present in 5 African countries (after Angola, Nigeria, Tanzania and Libya). The deal represents another strategic opportunity to apply Petrobras technology developed for operations in deep waters.

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