BP drops operatorship of sensitive exploration block offshore Brazil

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(S&P Global Platts) BP has handed over operatorship of an environmentally sensitive exploration block offshore Brazil in the Amazon Delta to state-run oil company Petrobras, BP confirmed Oct 26.

Petrobras will take over the operation of the FZA-M-59 block in the Foz do Amazonas Basin, after approval by Brazil’s National Agency for Oil, Gas and Biofuels (ANP) last week.

The move comes after French major Total last month dropped operating stakes in five exploration blocks offshore Brazil in the Amazon Delta, where the oil company has had trouble obtaining environmental permits to drill in the region.

Total and BP won the blocks in 2013 as part of a consortium with Petrobras. Total operated the blocks FZA-M-57, FZA-M-86, FZA-M-88, FZA-M-125 and FZA-M-127 with a 40% stake while BP and Petrobras each hold a 30% interest.

A BP spokesman confirmed that the company’s shared operatorship of block FZA-M-59 would be transferred to Petrobras but declined to comment on the future of its equity position in the remaining four blocks.

Exploration drilling in Foz do Amazonas has faced resistance from environmental groups following the discovery of a previously unknown coral reef in the turbid waters of the Amazon River delta. Total has been looking to drill seven exploration wells on the acreage but has suffered repeated delays due to a long-running struggle for approvals from Brazilian environmental regulator IBAMA.

Total’s move comes against the backdrop rising sensitivity by European oil majors over new oil exploration as public concern over climate change mounts. BP last month pledged to undertake no new oil exploration in new countries as part of its transition to cleaner energy. It also sold its stake in Prudhoe Bay and other Alaskan oilfields to Hilcorp.


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