Petrobras announces that, in a meeting held on July 28th, the Board of Directors approved the sale of the company’s stake in exploration block BM-S-8 to Statoil Brasil Óleo e Gás Ltda.

This transaction comes about as a result of a competitive bidding process and represents a significant development in the strategic partnership between the two companies, which have already signed cooperation agreements for technological development in offshore E&P.

It also represents part of the Petrobras portfolio management policy, which is giving priority to investment in assets with greater potential for short term cash generation, capital optimization and economies of scale, due to the standardization of production development projects. Petrobras has been achieving significant competitive advantages in the development of the Brazilian pre-salt layer, through the extensive application of standardized equipment across similar projects.

The base price negotiated for the stake in the BM-S-8 is US$ 2.5 billion. The first installment (US $ 1.5 billion), representing 50% of the total, will be paid once the transaction has been closed. The remaining amount will be paid in installments contingent upon subsequent events, such as the signing of the Production Individualization Agreement (unitization).

Block BM-S-8 is situated in the Santos Basin and is currently operated by Petrobras (66%), in partnership with Petrogal Brasil S.A. (14%), Queiroz Galvão Exploração e Produção S.A. (10%) and Barra Energia do Brasil Petróleo e Gás Ltda. (10%). A discovery was made in this block, through exploratory drilling in the Carcará area.

Furthermore, Petrobras and Statoil are negotiating a memorandum of understanding for the assessment of other strategic cooperation initiatives, with a view to activities over long-term.

This transaction opens up opportunities for partnerships with other companies that have considerable expertise and investment capacity, in order to strengthen the oil & gas industry in Brazil.

The deal forms an important part of the Petrobras 2015-2016 Partnership and Divestment Plan and completion is subject to the customary prior conditions, including the right of first refusal pertaining to the other partners in block BM-S-8 and approval by the responsible bodies.