Petrobras, PDVSA to Swap Majority Control of Fields, Refinery

Brazil's federal energy company Petrobras (NYSE: PBR) has agreed to give Venezuela's state oil company PDVSA majority stakes in at least six E&P JVs in Venezuela in exchange for control of a refinery project in Brazil, Petrobras said in a statement.

The agreement is part of a letter of intent (LOI) signed this week, the statement said.

PDVSA already had taken a 60% stake in five of the fields, leaving Petrobras with 40%. The shift took place following 2005 changes in Venezuela's legislation.

PDVSA also will take a controlling stake in the Carabobo 1 field in the Orinoco belt. The percentages will be decided in future negotiations.

The two companies also agreed to study a new upgrading unit to process heavy crude from Orinoco.

In exchange for the fields, Petrobras will assume 60% control of the 200,000-b/d heavy crude Abreu e Lima refinery that the two companies are preparing to build in Brazil's northeastern state of Pernambuco.

Initially, the two companies planned to split ownership equally.

The project's costs have grown to US$4 billion from US$2.5 billion, local press reported.

The LOI also includes development of the offshore Mariscal-Sucre project.

Investments in the Mariscal-Sucre region are estimated at US$2 billion for natural gas production, press reported.

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