BP considers selling part of major Brazil oil field to Petrobras

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BP considers Petrobras deal

Highlights

BP and Petrobras discuss a stake sale.
Bumerangue holds 8 billion barrels.
High CO2 levels complicate development.

The negotiations remain ongoing, and an agreement is not guaranteed, according to Bloomberg. Neither the size nor the potential value of the stake has been disclosed. BP and Petrobras declined to comment.

Bumerangue discovery presents technical challenges

Located in Brazil's Santos Basin, Bumerangue contains an estimated 8 billion barrels of liquids in place, according to BP. The figure describes the volume of hydrocarbons present in the reservoir, rather than the amount that can ultimately be recovered commercially. Initial samples revealed elevated carbon dioxide concentrations, potentially complicating development and increasing costs.

Petrobras has extensive experience in Brazil's deepwater fields and has been developing technology to separate carbon dioxide-rich gas from oil more efficiently. That expertise could prove valuable in determining how Bumerangue can be developed economically.

BP plans further appraisal drilling to assess the reservoir and determine the most suitable development approach. Halliburton will conduct the upcoming campaign, while BP is examining both early production options and a larger, longer-term project. Chief Executive Meg O'Neill has indicated that a final investment decision is unlikely before 2027.

BP also recently notified Brazilian regulators of a hydrocarbon discovery at the neighboring Tupinamba block, where it operates with a 50% interest alongside Shell. Drilling there is expected to precede further work at Bumerangue.

Petrobras seeks new reserves as production matures

Petrobras has been expanding exploration in Brazil and overseas as it prepares for a gradual decline in output from its most productive offshore fields. The company's chief executive, Magda Chambriard, estimated in September that Petrobras must add approximately 9 billion barrels of oil equivalent to its reserves by 2050 to sustain production.

Brazil's prolific pre-salt fields are expected to reach peak output around the middle of the next decade. That outlook is increasing pressure on Petrobras to secure new resources capable of supporting production over the longer term.

Potential partnership could reshape development plans

For BP, selling a minority interest could reduce its financial exposure while preserving access to one of its most promising discoveries. The company is seeking to rebuild reserves and increase production after years of disappointing performance. Petrobras, meanwhile, could gain access to another major offshore resource while applying its deepwater expertise to the project's carbon dioxide challenges.

With 8 billion barrels of liquids in place, Bumerangue could become a significant long-term asset for both companies. However, its commercial potential will depend on appraisal results, development costs, and whether the companies reach an agreement.

We also reported BP completes Gelsenkirchen refinery sale as cost overhaul advances.

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