CNOOC Sinopec Bottoms Brazilian Oilfield or Covers $14 Billion

The Brazilian oil and gas company OGXPetroleoeGasParticipacoesSA has made new progress in the sale of new oilfield assets.

On September 15, OGX executives were interviewed by the "Daily Economic News" in Beijing. The source stated that CNOOC and Sinopec have evaluated the data of the assets sold by OGX and that OGX will accept bids from companies that intend to bid in the next month. OGX hopes to complete the sale of new oil field equity before the end of this year.

A Sinopec exploratory expert said in an interview with the “Daily Economic News” that if CNOOC and Sinopec’s two companies bid alone, they are more likely to succeed.

Assets sold by OGX contend for contention

OGX’s executives stated that the company expects to sell its rights to no more than 30% of its newly discovered oilfields in the Camps Basin, Brazil. It will accept bids from potential bidders in October or finalize bids before the end of the year. Winner.

The Brazilian oil upstart OGX is part of the EBX Industrial Group and has operations and development projects in 29 regions in Brazil owned by Brazilian billionaire Eike Batista. Last month, the rich man said he was considering selling 30% of OGX's equity.

OGX plans to sell assets and it has attracted the interest of at least six companies, including CNPC, Chevron, Norway's state-owned oil and ExxonMobil.

OGX’s executives stated that in addition to CNOOC and Sinopec, the company intends to include a U.S. company, an Australian company, two European companies, and an Asian company, but he did not mention whether PetroChina is also selling it to the company. Assets are evaluated.

The head of the investor relations department of CNOOC did not comment on this yesterday.

The assets sold are quite good

OGX executives yesterday estimated the value of the deal to be in the range of US$12 billion to US$14 billion, far exceeding the rumors previously claimed of US$7 billion.

The reason why CNOOC and Sinopec are interested in the assets sold by OGX is that “the Campos Basin is the best part of Brazil's crude oil exploration block, and the success rate of discoverable crude oil in exploration is quite high.” According to the above-mentioned Sinopec exploration experts.

From May to July of this year, OGX continuously discovered a large amount of recoverable crude oil in the exploration of the Camps Basin.

The above-mentioned experts said that in the world energy production pattern, Central and South America has a place, and Brazil is the second largest oil producer in Central and South America. Certainly, Chinese companies that are actively exploring overseas energy sources must not be absent.

At present, Brazil has also discovered a deep-sea oil field near the Rio de Janeiro coast. It is estimated that oil reserves will be as high as 45 billion barrels, and Brazil may become one of the world’s largest oil producers and exporters.

Single bids are more successful

So far, CNOOC has no gains in the acquisition of oil and gas assets in Brazil. This bid is an excellent opportunity for CNOOC to expand its business in Brazil. However, its rival, Sinopec, has already made some gains in Brazil, becoming the first Chinese company to obtain the mining rights in the Brazilian oil and gas sector.

On April 15, Sinopec and Petrobras signed a package of agreements including the procurement of crude oil and exploration rights for two deepwater blocks.

It is not yet clear whether CNOOC and Sinopec are each independently bidding for 30% of the equity, or are they jointly bidding.

In order to prevent Chinese oil companies from vicious competition in overseas acquisitions, the National Energy Agency and the National Development and Reform Commission have asked the oil companies to cooperate when bidding for the same target overseas. If no agreement can be reached, companies can still submit preliminary quotations on their own, but if there are more than one company, the companies with the lowest quotations should be relegated.

The above-mentioned experts of Sinopec analyzed that the bids of CNOOC and Sinopec are entirely market actions and should be bids by companies individually.

He said: “If you bid alone, the chances of success will be even greater, because there are two kinds of bidding options and one more chance of success.” The two companies’ separate bids also facilitate the depressing of the price, and lower prices can bring more benefits. Additional conditions for Chinese companies.

"The bidding plan is not just looking at the price of the quotation. It is not that the higher the quotation is, the easier it is to win the bid. It also depends on other commercial terms, including the rate of return and the output, which are more complicated." The above exploration expert said.