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PetroRio Secures Petrobras 20% Concession In Bijupirá And Salema Oil And Gas Fields

|Includes: Petrobras - Petroleo Brasileiro S.A. (PBR)

The transaction amounts to US$ 25 million and is subject to adjustments that are common to this type of operation.

Brazilian oil and gas major, Petrobras (NYSE:PBR) has snapped up an agreement with Petronius S.A. ('Petronius') for contracts that call for a sale of 20% of the former's stake in the concessions of Bijupirá and Salema fields, both currently operated by Shell.

The fields are located in Campos Basin locality, with a depth range between 480 and 850 meters deep. Daily average production in the region is estimated at 22000 barrels of oil and around 325 thousand m3 of natural gas. The extraction of oil is light, ranging between 28 degrees to 31 degrees API.

The transaction is expected to cost around $25 million, though it is subject to adjustments in the terms and references of the contract, which is common for most types of oil and gas operations in various fields. The divestment is part of Petrobras Divestment Plan, and also in line with its just recently laid out 2015-2019 Business and Management Plan, which contains almost similar features as laid out in the former. The underlying theme is the optimization of Petrobras' portfolio in Exploration and Production area.

The final deal will only be sealed once the purchase and sale condition meets certain proceeding conditions, such as the necessary approval of assignment of rights by the Brazilian National Petroleum Agency, the ANP, and Brazilian Administrative Council for Economic Defense Board of Directors, and finally CADE.

The development comes as prosecutors investigating the extent of corruption in Petrobras have indicated that the scope of corruption might be much larger than anticipated, way more than the $6billion that the oil giant has revealed in its financial statements to investors. This is likely to raise concerns for investors that more bad news may arise from the scandal and the company is finding it hard to put its scandal behind.

In the latest round of investigation, prosecutors have arrested an official on suspicion of money laundering, corruption, siphoning off public funds, as well as contract fraud for receiving drilling contracts. He has not been charged with any crime as of now but is suspected of hiding around 11 million euros in Monaco. He is also alleged to have received bribes for the two contracts operated by two foreign companies.

His lawyer has said that his client has denied those allegations with his foreign dealings and stated that his arrest is unnecessary, as he has made himself available for investigation.

Petrobras stock price ended the day at $8.21, a decline of more than 7%.