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Ecopetrol Expands Footprints in Brazil's Pre-Salt Region

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To expand footprints in Brazil's Pre-Salt Region, Ecopetrol S.A. EC has inked an agreement with the Royal Dutch Shell plc RDS.A and Chevron Corporation CVX groups.

Per the deal, Ecopetrol has acquired a 10% stake in the Saturno block, located in the central region of the Santos basin. This stake was allotted to Royal Dutch Shell and Chevron on Sep 28, 2017 in the Fifth Pre-Salt Round held by the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP).

The agreement is subject to approval by Brazil's Ministry of Mines and Energy, the ANP as well as other customary closing conditions. The deal signed by the three companies in Río de Janeiro provides access to the Saturno block.

Located off the coast of the states of Sao Paulo and Rio de Janeiro, the Saturno is spread across 1,100 square kilometers. The consortium, which originally comprised Royal Dutch Shell and Chevron, had carried out a proposal assigning a production stake of 70.2% in favor of the Brazilian State. On completion of Ecopetrol’s acquisition of 10% interest in the block, Royal Dutch Shell, the operator, and Chevron hold an interest of 45% each.

This is the second block in Brazil where Ecopetrol holds a stake. Also, the company won another block in the Santos basin of Brazil's Pre-Salt Region along with two other companies. Ecopetrol holds 20% of the Pau-Brasil exploratory block. The other partners are CNOOC Limited (CEO) and BP plc BP holding 30% and 50%, respectively.

Currently, Ecopetrol is active in five blocks in Brazil, located in the Santos, Foz de Amazonas, Potiguar and Ceara basins along with two Pre-Salt blocks.

Zacks Rank

Currently, Ecopetrol carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Ecopetrol S.A. (EC) : Free Stock Analysis Report
 
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