Important oil industry intel emerging this week. With reports suggesting the world’s largest oil and gas company is about to move into a completely new play area.
The firm is ExxonMobil. And the region is the embattled Brazil offshore.
The Wall Street Journal broke the story about Exxon’s potential jump into Brazil. Citing familiar persons as saying the major is in talks to joint-venture projects held by state oil firm Petrobras.
Sources also said Exxon is looking at acquiring wholly-owned projects in the Brazilian offshore. By participating in licensing rounds planned by the government later this year.
Exxon officials declined to comment. But Petrobras confirmed to Reuters that the major has expressed “strong interest” in Brazil projects.
If Exxon does indeed make a move into Brazil, it will be a major redemption for the country’s troubled oil sector. With any deals here representing an important stamp of approval from one of the world’s most high-profile technical groups.
That comes after Brazil has been changing rules to make exploration more attractive. Including allowing foreign operators to wholly own licenses without Petrobras, and reforming tax and purchasing rules for offshore projects.
A deal from Exxon would show the world these changes have been successful in attracting capital back to Brazil. And that endorsement would come at a critical time — as the country is gearing up for its first bid rounds in the offshore subsalt play since 2013.
Those might be the plays Exxon is reportedly looking at bidding on. Which would provide further proof that Brazil still cuts it as an exploration destination.
Whatever the case, even the rumors of an Exxon buy-in are likely to boost interest in Brazil as we move closer to the bid rounds. And if a deal does materialize, this could again become one of the hottest plays on the planet — watch for any announcements from Exxon and Petrobras over the coming weeks.
Here’s to setting up shop,